Time Inconsistency
Time inconsistency is when a plan that is optimal to announce today is not optimal to carry out tomorrow, so promises without commitment are not believed.
Definition
Time Inconsistency refers to time inconsistency is when a plan that is optimal to announce today is not optimal to carry out tomorrow, so promises without commitment are not believed. Keep that definition fixed when comparing series, managers, or regimes — renaming the same tape does not create a new signal.
Why it matters
It is a named object desks use to frame risk, positioning, or process. When time inconsistency is when a plan that is optimal to announce today is not optimal to carry out tomorrow, so promises without commitment are not believed shifts, related hedges, limits, and narratives usually need an explicit update rather than a quiet assumption.
Case
Suppose a desk is positioned for the opposite of what time inconsistency is saying. If time inconsistency is when a plan that is optimal to announce today is not optimal to carry out tomorrow, so promises without commitment are not believed moves against that book, the first question is not “is the story clever?” but whether size, hedges, and stop logic still match the observation.
How to read it
Keep the definition fixed, then challenge it with cross-checks before sizing. Prefer a short written null hypothesis for Time Inconsistency: what would falsify the current reading in the next window?