An Implementation-theoretic Approach to Non-cooperative Foundations

James Bergin and John Duggan

No 964, Working Papers from Queen's University, Department of Economics

Abstract: This paper reconsiders the literature on non-cooperative foundations of cooperative solutions. The goal of non-cooperative foundations is to provide credible non-cooperative models of negotiation and coalition formation whose equilibrium outcomes agree with a given cooperative solution. Here we argue that this goal is best achieved by explicitly modeling the physical environment and individual preferences, and constructing game forms {independent of preferences} to implement the cooperative solution. In addition, the game form should reflect salient aspects of negotiation. We propose a general model (called a {strategic environment}) of the physical environment; we characterize the coalitional functions arising from strategic environments; we demonstrate our approach for the case of the core; and we provide conditions under which core payoffs correspond to payoffs from core outcomes.

Keywords: Non-cooperative foundations; Implementation (search for similar items in EconPapers)
JEL-codes: C71 D71 D78 (search for similar items in EconPapers)
Date: 1997-11
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Related works:
Journal Article: An Implementation-Theoretic Approach to Non-cooperative Foundations (1999)
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Persistent link: http://EconPapers.repec.org/RePEc:qed:wpaper:964

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