Abstract
In this paper, we present an overlapping generation model (OLG for short) of resource extraction with a random production function and an altruism having both paternalistic and non-paternalistic features. All generations are risk-sensitive with a constant coefficient of absolute risk aversion. The preferences are represented by a possibly dynamic inconsistent dynamic recursive utility function with non-cooperating generations. Under general conditions on the aggregator and transition probability, we examine the existence and the uniqueness of a recursive utility function and the existence of a stationary mixed Markov Perfect Nash Equilibria.
Citation
Łukasz Balbus. "Markov perfect equilibria in OLG models with risk sensitive agents." Topol. Methods Nonlinear Anal. 53 (1) 309 - 333, 2019. https://doi.org/10.12775/TMNA.2019.016