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A Mechanism for Inducing Cooperation in Non-Cooperative Environments: Theory and Applications


  • Christopher J. Ellis

    () (University of Oregon Economics Department)

  • Anne van den Nouweland

    () (University of Oregon Economics Department)


We construct a market based mechanism that induces players in a non-cooperative game to make the same choices as characterize cooperation. We then argue that this mechanism is applicable to a wide range of economic questions and illustrate this claim using the problems of "The Tragedy of the Commons" and "R&D Spillovers in Duopoly".

Suggested Citation

  • Christopher J. Ellis & Anne van den Nouweland, 2000. "A Mechanism for Inducing Cooperation in Non-Cooperative Environments: Theory and Applications," University of Oregon Economics Department Working Papers 2000-2, University of Oregon Economics Department, revised 01 Feb 2000.
  • Handle: RePEc:ore:uoecwp:2000-2

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    Cooperation; Externalities; Spillovers; Efficiency.;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H40 - Public Economics - - Publicly Provided Goods - - - General


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