Endogenous Games and Mechanisms: Side Payments Among Players
AbstractWe 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by EconWPA in its series Microeconomics with number 0211008.
Date of creation: 04 Nov 2002
Date of revision:
Note: Type of Document - pdf
Contact details of provider:
Web page: http://22.214.171.124
game theory; mechanism design; contracts; side payments; endogenous games; public goods;
Other versions of this item:
- Matthew O. Jackson & Simon Wilkie, 2005. "Endogenous Games and Mechanisms: Side Payments Among Players," Review of Economic Studies, Oxford University Press, vol. 72(2), pages 543-566.
- Wilkie, Simon & Jackson, Matthew O., 2002. "Endogenous Games and Mechanisms: Side Payments Among Players," Working Papers 1150, California Institute of Technology, Division of the Humanities and Social Sciences.
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-11-10 (All new papers)
- NEP-GTH-2002-11-10 (Game Theory)
- NEP-LAW-2002-11-10 (Law & Economics)
- NEP-PBE-2002-11-10 (Public Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Anderlini, Luca & Felli, Leonardo, 2001.
"Costly Bargaining and Renegotiation,"
Econometric Society, vol. 69(2), pages 377-411, March.
- Luca Anderlini & Leonardo Felli, 1999. "Costly Bargaining and Renegotiation," CESifo Working Paper Series 213, CESifo Group Munich.
- Anderlini, L. & Felli, L., 1999. "Costly bargaining and renegotiation," Discussion Paper Series In Economics And Econometrics 9910, Economics Division, School of Social Sciences, University of Southampton.
- Fershtman, C. & Nitzan, S., 1988.
"Dynamic Voluntary Provision Of Public Goods,"
21-88, Tel Aviv.
- Bensaid, B. & Gary-Bobo, R., 1991.
"An Exact Formula for the Lion's Share : a Model of Pre-Play Negotiation,"
CORE Discussion Papers
1991059, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Bensaid, Bernard & Gary-Bobo, Robert J., 1996. "An Exact Formula for the Lion's Share: A Model of Preplay Negotiation," Games and Economic Behavior, Elsevier, vol. 14(1), pages 44-89, May.
- Leonid Hurwicz, 1994. "Economic design, adjustment processes, mechanisms, and institutions," Review of Economic Design, Springer, vol. 1(1), pages 1-14, December.
- Varian, H.R., 1991.
"Sequential Provision of Public Goods,"
14, Michigan - Center for Research on Economic & Social Theory.
- Hal R. Varian, 1994. "Sequential Provision of Public Goods," Public Economics 9401003, EconWPA.
- Varian, H.R., 1990. "Sequential Provision Of Public Goods," Papers 90-02, Michigan - Center for Research on Economic & Social Theory.
- Varian, H.R., 1989. "Sequential Provision Of Public Goods," Papers 89-17, Michigan - Center for Research on Economic & Social Theory.
- Leslie M. Marx & Steven A. Matthews, .
""Dynamic Voluntary Contribution to a Public Project'',"
CARESS Working Papres
99-01, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
- Marx, Leslie M & Matthews, Steven A, 2000. "Dynamic Voluntary Contribution to a Public Project," Review of Economic Studies, Wiley Blackwell, vol. 67(2), pages 327-58, April.
- Leslie M. Marx & Steven A. Matthews, . "Dynamic Voluntary Contribution to a Public Project," Penn CARESS Working Papers 6f8dbf67d492ff8a10975496b, Penn Economics Department.
- Leslie M. Marx & Steven A. Matthews, 1997. "Dynamic Voluntary Contribution to a Public Project," Discussion Papers 1188, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Andreoni,J. & Varian,H., 1999. "Pre-play contracting in the prisoners' dilemma," Working papers 18, Wisconsin Madison - Social Systems.
- Ray, D. & Vohra, R., 1993.
"Equilibrium Binding Agreements,"
21, Boston University - Department of Economics.
- Guttman, Joel M, 1987. "A Non-Cournot Model of Voluntary Collective Action," Economica, London School of Economics and Political Science, vol. 54(213), pages 1-19, February.
- Aghion, Philippe & Bolton, Patrick, 1987. "Contracts as a Barrier to Entry," American Economic Review, American Economic Association, vol. 77(3), pages 388-401, June.
- (*), Kai A. Konrad & Wolfgang Buchholz & Kjell Erik Lommerud, 1997.
"Stackelberg leadership and transfers in private provision of public goods,"
Review of Economic Design,
Springer, vol. 3(1), pages 29-43.
- Buchhilz, W. & Konrad, K.A. & Lommerund, K.E., 1997. "Stackelberg Leadership and Transfers in Private Provision of Public Goods," Norway; Department of Economics, University of Bergen 170, Department of Economics, University of Bergen.
- Lagunoff, Roger, 1992. "Fully Endogenous Mechanism Selection on Finite Outcome Sets," Economic Theory, Springer, vol. 2(4), pages 465-80, October.
- Fershtman, Chaim & Judd, Kenneth L & Kalai, Ehud, 1991.
"Observable Contracts: Strategic Delegation and Cooperation,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(3), pages 551-59, August.
- Chaim Fershtman & Kenneth L. Judd & Ehud Kalai, 1990. "Observable Contracts: Strategic Delegation and Cooperation," Discussion Papers 879, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Admati, Anat R & Perry, Motty, 1991. "Joint Projects without Commitment," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 259-76, April.
- Andrea Prat & Aldo Rustichini, 2003.
"Games Played Through Agents,"
Econometric Society, vol. 71(4), pages 989-1026, 07.
- Jackson, Matthew O., 1999.
"A Crash Course in Implementation Theory,"
1076, California Institute of Technology, Division of the Humanities and Social Sciences.
- Guttman, Joel M, 1978. "Understanding Collective Action: Matching Behavior," American Economic Review, American Economic Association, vol. 68(2), pages 251-55, May.
- Kalai, Ehud, 1981. "Preplay negotiations and the prisoner's dilemma," Mathematical Social Sciences, Elsevier, vol. 1(4), pages 375-379, August.
- Ilya Segal, 1999. "Contracting With Externalities," The Quarterly Journal of Economics, MIT Press, vol. 114(2), pages 337-388, May.
- McAfee, R Preston, 1993. "Mechanism Design by Competing Sellers," Econometrica, Econometric Society, vol. 61(6), pages 1281-1312, November.
- Bernheim, B Douglas & Whinston, Michael D, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, MIT Press, vol. 101(1), pages 1-31, February.
- Miller, Nolan H & Pazgal, Amit I, 2001. "The Equivalence of Price and Quantity Competition with Delegation," RAND Journal of Economics, The RAND Corporation, vol. 32(2), pages 284-301, Summer.
- Ehud Kalai & Dov Samet, 1983. "Unanimity Games and Pareto Optimality," Discussion Papers 546, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Richard B. Freeman, 2007.
"Searching for the EU Social Dialogue Model,"
AIEL Series in Labour Economics,
in: Nicola Acocella & Riccardo Leoni (ed.), Social Pacts, Employment and Growth. A Reappraisal of Ezio Tarantelli’s Thought, edition 1, chapter 11, pages 221-238
AIEL - Associazione Italiana Economisti del Lavoro.
- Cheng-Zhong Qin, 2008. "Inducing Cooperation by Self-Stipulated Penalties," Annals of Economics and Finance, Society for AEF, vol. 9(2), pages 385-395, November.
- Kimbrough, Erik O. & Sheremeta, Roman M., 2013.
"Side-payments and the costs of conflict,"
International Journal of Industrial Organization,
Elsevier, vol. 31(3), pages 278-286.
- Kimbrough, Erik & Sheremeta, Roman, 2013. "Side-Payments and the Costs of Conflict," MPRA Paper 46808, University Library of Munich, Germany.
- Erik O. Kimbrough & Roman M. Sheremeta, 2012. "Side-Payments and the Costs of Conflict," Working Papers 12-01, Chapman University, Economic Science Institute.
- Jianpei Li & Paul Schweinzer, 2013. "Efficiency in strategic form games: A little trust can go a long way," Discussion Papers 13/19, Department of Economics, University of York.
- B�rd Harstad, 2012. "Buy Coal! A Case for Supply-Side Environmental Policy," Journal of Political Economy, University of Chicago Press, vol. 120(1), pages 77 - 115.
- Robert Hahn & Robert Ritz, 2014. "Optimal Altruism in Public Good Provision," Cambridge Working Papers in Economics 1403, Faculty of Economics, University of Cambridge.
- Emanuele Gerratana & Levent Koçkesen, 2013. "Commitment without Reputation: Renegotiation-Proof Contracts under Asymmetric Information," KoÃ§ University-TUSIAD Economic Research Forum Working Papers 1323, Koc University-TUSIAD Economic Research Forum.
- Conley, John P. & Neilson, William, 2009. "Endogenous games and equilibrium adoption of social norms and ethical constraints," Games and Economic Behavior, Elsevier, vol. 66(2), pages 761-774, July.
- Rohan Dutta & Ryosuke Ishii, 2013. "Coordinating by Not Committing : Efficiency as the Unique Outcome," Cahiers de recherche 10-2013, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Ellingsen, Tore & Paltseva, Elena, 2012. "The private provision of excludable public goods: An inefficiency result," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 658-669.
- Conley, John P. & Neilson, William S., 2013. "Endogenous coordination and discoordination games: Multiculturalism and assimilation," Journal of Economic Behavior & Organization, Elsevier, vol. 92(C), pages 176-191.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA).
If references are entirely missing, you can add them using this form.