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Social rationalizability with mediation

Author

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  • Herings, P. Jean-Jacques

    (RS: GSBE Theme Data-Driven Decision-Making, RS: GSBE Theme Conflict & Cooperation, Microeconomics & Public Economics)

  • Mauleon, Ana
  • Vannetelbosch, Vincent

Abstract

We propose a solution concept for social environments called social rationalizability with mediation that identifies the consequences of common knowledge of rationality and farsightedness. In a social environment several coalitions may and could be willing to move at the same time. Individuals not only hold conjectures about the behaviors of other individuals but also about how a mediator is going to solve conflicts of interest. The set of socially rationalizable outcomes with mediation is shown to be non-empty for all social environments and it can be computed by an iterative reduction procedure. We show that social rationalizability with mediation does not necessarily satisfy coalitional rationality when the number of coalition members is greater than two.

Suggested Citation

  • Herings, P. Jean-Jacques & Mauleon, Ana & Vannetelbosch, Vincent, 2021. "Social rationalizability with mediation," Research Memorandum 019, Maastricht University, Graduate School of Business and Economics (GSBE).
  • Handle: RePEc:unm:umagsb:2021019
    DOI: 10.26481/umagsb.2021019
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    1. Herings, P.J.J. & Mauleon, A. & Vannetelbosch, V., 2000. "Social rationalizability," Research Memorandum 017, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    2. Chenghong Luo & Ana Mauleon & Vincent Vannetelbosch, 2021. "Network formation with myopic and farsighted players," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(4), pages 1283-1317, June.
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    12. P. Jean-Jacques Herings & Ana Mauleon & Vincent Vannetelbosch, 2019. "Stability of networks under horizon-K farsightedness," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 68(1), pages 177-201, July.
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    Cited by:

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    2. de Callatay, Pierre & Mauleon, Ana & Vannetelbosch, Vincent, 2023. "Local Farsightedness in Network Formation," LIDAM Discussion Papers CORE 2023003, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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    More about this item

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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