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Endogenous Games and Mechanisms: Side Payments Among Players

  • Wilkie, Simon
  • Jackson, Matthew O.

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.

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Paper provided by California Institute of Technology, Division of the Humanities and Social Sciences in its series Working Papers with number 1150.

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Date of creation: Nov 2002
Date of revision:
Publication status: Published: published in Review of Economic Studies, 2005, V. 72, pp. 543-566.
Handle: RePEc:clt:sswopa:1150
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