Corrigendum: Long-Term Contracting With Time-Inconsistent Agents (Econometrica, 89, 2, (793–824), 10.3982/ECTA17126)

THE MAIN RESULT in Gottlieb and Zhang (2021, Theorem 1) showed that in any equilibrium of the game between firms and a time-inconsistent agent, the inefficiency arising from naive present-bias vanishes as the number of periods grows. While this result is correct, the paper failed to note that an equilibrium may not exist. This document corrects this issue and provides general conditions for existence. Equilibrium may not exist in the model because each firm’s strategy space (historydependent consumption vectors) is not compact. This means that the equilibrium program, defined on page 800, may not have a solution. While the auxiliary program always has a solution, the equivalence between this program and the equilibrium program (Lemma 2) only holds when the equilibrium program has a solution.1.