Which Acceptable Agreements are Equilibria?
AbstractI 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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Bibliographic InfoPaper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2003 with number 204.
Date of creation: 04 Jun 2003
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coalition formation; normal form games; agreement; cartel; environmental agreement; public good;
Other versions of this item:
- C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-06-16 (All new papers)
- NEP-GTH-2003-06-16 (Game Theory)
- NEP-NET-2003-10-05 (Network Economics)
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