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Endogenous Games and Mechanisms: Side Payments Among Players

  • Matthew O. Jackson

    (California Institute of Technology)

  • Simon Wilkie

    (California Institute of Technology)

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 EconWPA in its series Microeconomics with number 0211008.

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Date of creation: 04 Nov 2002
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Handle: RePEc:wpa:wuwpmi:0211008
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