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Which acceptable agreements are equilibria?

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  • Thoron, Sylvie

Abstract

I propose a normal form game of agreement formation in which each player's strategy is to say for each size of agreement whether it is acceptable or not. I propose a refinement, which guarantees that each one of these choices is self-enforcing. For general payoff functions, which exhibit positive externalities, I analyse situations in which symmetric players have the possibility to reach a unique agreement. I prove the uniqueness of this equilibrium. I give two specific examples: a cartel and an agreement to contribute to a public good.
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  • Thoron, Sylvie, 2004. "Which acceptable agreements are equilibria?," Mathematical Social Sciences, Elsevier, vol. 47(1), pages 111-134, January.
    • Handle: RePEc:eee:matsoc:v:47:y:2004:i:1:p:111-134
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    Cited by:

    1. Marc Escrihuela-Villar, 2009. "A note on cartel stability and endogenous sequencing with tacit collusion," Journal of Economics, Springer, vol. 96(2), pages 137-147, March.
    2. László Á. Kóczy, 2018. "Partition Function Form Games," Theory and Decision Library C, Springer, number 978-3-319-69841-0, July.

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    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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