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Equilibrium binding agreements under diverse behavioral assumptions

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  • Effrosyni Diamantoudi

Abstract

This paper extends the work of Ray and Vohra [3]. It ascertains which partitions of players will emerge and what actions will these players choose under each partition, when they can sign binding agreements and their actions have externalities. The emphasis, however, is placed on situations with multiple outcomes and how agents behave in the presence of such multiplicity. In particular, a deviating coalition considers all the likely outcomes that may prevail upon its deviation, and selects (if possible) a subset of them. Three augmentations of Ray and Vohra's [3] solution concept are defined, capturing three distinct behavioral assumptions. Efficiency of and the relation between the three notions are discussed. Copyright Springer-Verlag Berlin Heidelberg 2003

Suggested Citation

  • Effrosyni Diamantoudi, 2003. "Equilibrium binding agreements under diverse behavioral assumptions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 22(2), pages 431-446, September.
  • Handle: RePEc:spr:joecth:v:22:y:2003:i:2:p:431-446
    DOI: 10.1007/s00199-002-0301-z
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    References listed on IDEAS

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    Cited by:

    1. Albert Banal-Estañol & Ines Macho-Stadler & Jo Seldeslachts, 2003. "Mergers, Investment Decisions and Internal Organisation," CESifo Working Paper Series 944, CESifo Group Munich.
    2. Effrosyni Diamantoudi, 2003. "Equilibrium binding agreements under diverse behavioral assumptions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 22(2), pages 431-446, September.
    3. Sheng-Chieh Huang & Xiao Luo, 2008. "Stability, sequential rationality, and subgame consistency," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 34(2), pages 309-329, February.
    4. Haeringer, Guillaume, 2004. "Equilibrium binding agreements: a comment," Journal of Economic Theory, Elsevier, vol. 117(1), pages 140-143, July.
    5. repec:smu:ecowpa:1403 is not listed on IDEAS
    6. Roland Pongou & Lawrence Diffo Lambo & Bertrand Tchantcho, 2008. "Cooperation, stability and social welfare under majority rule," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 35(3), pages 555-574, June.

    More about this item

    Keywords

    Keywords and Phrases:Coalition structures; Binding agreements; Stability.; JEL Classification Numbers:C70; C71.;

    JEL classification:

    • C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - Other
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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