Template-type: ReDIF-Paper 1.0
Author-Name: Francisco Álvarez González
Author-Workplace-Name:  Université de la Méditerranée (Aix-MarseilleII)
Author-Name: Christophe Deissenberg
Author-Workplace-Name: Universidad Complutense, Madrid, Spain
Author-Person: pde232 
Title: Cheating for the common good in a Macroeconomic policy game
Abstract: This paper presents a simple repeated-game model of interaction between an optimizing government 
	and the private sector. Two polar cases are considered: (a) the private sector is represented by a 
	single agent; and (b) there is a continuum of heterogenous atomistic private agents. In both cases, 
	the government starts each repetition by making a non-binding announcement about its future actions. 
	The players have complete and perfect information, with one exception: the private agents do not 
	know whether or not the government will act as announced. Thus, each private agent ieither behaves 
	with probability đi as if it trusted the announcement, or plays with probability 1 . đi as a Stackelberg 
	leader. After observing the reaction of the private sector, the government
Classification-JEL: C69, C79, E5
Keywords: Macroeconomic policy-making, Kydland-Prescott model, time inconsistency, reinforcement learning, reversed Stackelberg games, optimal cheating
	strategies, reputation, credibility.
Length: 43 page
Creation-Date: 2001
X-File-Ref: http://america.sim.ucm.es/repec/ucm/ref/doicae0104.txt
File-URL: https://eprints.ucm.es/id/eprint/6788/1/0104.pdf
File-Format: Application/pdf
Handle: RePEc:ucm:doicae:0104