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Equilibrium Binding Agreements under Diverse Bahavioral Assumptions

  • Effrosyni Diamantoudi

    ()

    (Department of Economics, University of Aarhus, Denmark)

This paper extends the work of Ray and Vohra (1997). 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, avoiding thus an excessively confident behavior, which is the case under Ray and Vohra's notion. Three augmentations of their solution concept are defined, capturing three distinct behavioral assumptions. Their efficiency and relation to each other are discussed.

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Paper provided by Department of Economics and Business Economics, Aarhus University in its series Economics Working Papers with number 2001-2.

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Handle: RePEc:aah:aarhec:2001-2
Contact details of provider: Web page: http://www.econ.au.dk/afn/

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  1. Rosholm, Michael & Svarer, Michael, 2001. "Structurally dependent competing risks," Economics Letters, Elsevier, vol. 73(2), pages 169-173, November.
  2. Boriss Siliverstovs, . "The Bi-parameter Smooth Transition AutoRegressive model," Economics Working Papers 2000-16, Department of Economics and Business Economics, Aarhus University.
  3. Skott, Peter & Auerbach, Paul, 2000. "Skill asymmetries, increasing wage inequality and unemployment," Economics Discussion Papers 2000-9, School of Economics, Kingston University London.
  4. Effrosyni Diamantoudi, . "Equilibrium Binding Agreements under Diverse Bahavioral Assumptions," Economics Working Papers 2001-2, Department of Economics and Business Economics, Aarhus University.
  5. Debraj Ray & Rajiv Vohra, 1996. "A Theory of Endogenous Coalition Structure," Papers 0068, Boston University - Industry Studies Programme.
  6. Haldrup, Niels Prof. & Lildholdt, Peter, 2000. "Local Power Functions of Tests for Double Unit Roots," University of California at San Diego, Economics Working Paper Series qt01j3m1h6, Department of Economics, UC San Diego.
  7. Bernheim, B. Douglas & Peleg, Bezalel & Whinston, Michael D., 1987. "Coalition-Proof Nash Equilibria I. Concepts," Journal of Economic Theory, Elsevier, vol. 42(1), pages 1-12, June.
  8. Jakob Roland Munch & Michael Svarer, . "Mortality and Socio-economic Differences in a Competing Risks Model," Economics Working Papers 2001-1, Department of Economics and Business Economics, Aarhus University.
  9. Licun Xue, 1998. "Coalitional stability under perfect foresight," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 11(3), pages 603-627.
  10. Licun Xue, . "Stable Agreements in Infinitely Repeated Games," Economics Working Papers 2000-13, Department of Economics and Business Economics, Aarhus University.
  11. Licun Xue, . "A Notion of Consistent Rationalizability - Between Weak and Pearce's Extensive Form Rationalizability," Economics Working Papers 2000-4, Department of Economics and Business Economics, Aarhus University.
  12. Elliott, Graham & Jansson, Michael, 2002. "Testing for Unit Roots with Stationary Covariates," University of California at San Diego, Economics Working Paper Series qt4v35s2gv, Department of Economics, UC San Diego.
  13. Moulin, Herve, 1994. "Social choice," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 2, chapter 31, pages 1091-1125 Elsevier.
  14. Jamsheed Shorish, . "Quasi-Static Macroeconomic Systems," Economics Working Papers 2000-3, Department of Economics and Business Economics, Aarhus University.
  15. Ray, Debraj & Vohra, Rajiv, 1997. "Equilibrium Binding Agreements," Journal of Economic Theory, Elsevier, vol. 73(1), pages 30-78, March.
  16. Donsimoni, Marie-Paule & Economides, Nicholas S & Polemarchakis, Herakles M, 1986. "Stable Cartels," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(2), pages 317-27, June.
  17. Claude d'Aspremont & Alexis Jacquemin & Jean Jaskold Gabszewicz & John A. Weymark, 1983. "On the Stability of Collusive Price Leadership," Canadian Journal of Economics, Canadian Economics Association, vol. 16(1), pages 17-25, February.
  18. Peter Skott, . "Demand Policy in the Long Run," Economics Working Papers 2000-17, Department of Economics and Business Economics, Aarhus University.
  19. Effrosyni Diamantoudi & Licun Xue, . "Farsighted Stability in Hedonic Games," Economics Working Papers 2000-12, Department of Economics and Business Economics, Aarhus University.
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