On the Investment Game

概要

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We examine the investment game analyzed by Fudenberg and Levine (1994) where longrun players (capitalists) live infinitely, borrow investment goods from short-lived investors, and produce an output. They argued that the maximal sum of equilibrium payoffs can attain a first best payoff when discount factor is close to one and the number of capitalists is large enough. However, we show that the supremum of the sum of equilibrium payoffs is different from the first best payoff in general. Furthermore, if the probability of success of production is sufficiently high, the supremum is unchangeable with respect to the number of capitalists.
跡見学園女子大学の論文
2007-03-15