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Endogenous Games and Mechanisms: Side Payments Among Players

Author

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  • Matthew O. Jackson

    (California Institute of Technology)

  • Simon Wilkie

    (California Institute of Technology)

Abstract

We characterize the outcomes of games when players may make binding offers of strategy contingent side payments before the game is played. This does not always lead to efficient outcomes, despite complete information and costless contracting. The characterizations are illustrated in a series of examples, including voluntary contribution public good games, Cournot and Bertrand oligopoly, principal-agent problems, and commons games, among others.

Suggested Citation

  • Matthew O. Jackson & Simon Wilkie, 2002. "Endogenous Games and Mechanisms: Side Payments Among Players," Microeconomics 0211008, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpmi:0211008
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    More about this item

    Keywords

    game theory; mechanism design; contracts; side payments; endogenous games; public goods;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law

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