Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7359098 | Journal of Economic Theory | 2018 | 24 Pages |
Abstract
We give a set of sufficient conditions for uniqueness of a time-consistent stationary Markov consumption policy for a quasi-hyperbolic household under uncertainty. To the best of our knowledge, this uniqueness result is the first presented in the literature for general settings, i.e. under standard assumptions on preferences, as well as some new condition on a transition probability. This paper advocates a “generalized Bellman equation” method to overcome some predicaments of the known methods and also extends our recent existence result. Our method also works for returns unbounded from above. We provide a few natural extensions of optimal policy uniqueness: convergent and accurate computational algorithm, monotone comparative statics result and generalized Euler equation.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Åukasz Balbus, Kevin Reffett, Åukasz Woźny,