Negotiation-proof Nash equilibrium

Licun Xue ()

International Journal of Game Theory, 2000, vol. 29, issue 3, 339-357

Abstract: This paper defines "negotiation-proof Nash equilibrium'', a notion that applies to environments where players can negotiate openly and directly prior to the play of a noncooperative game. It recognizes the possibility that a group of self-interested players may choose, voluntarily and without binding agreement, to coordinate their choice of strategies and make joint objections; moreover, it takes the perfect foresight of rational players fully into account. The merit of the notion of negotiation-proof Nash equilibrium is twofold: (1) It offers a way to rectify the nestedness assumption and myopia embedded in the notion of coalition-proof Nash equilibrium. (2) The negotiation process is formalized by a "graph", which serves as a natural extension to the approach that models preplay communication by an extensive game.

Keywords: coalition; negotiation; Nash equilibrium; self-enforcing agreement; perfect foresight (search for similar items in EconPapers)
JEL-codes: C70 C71 C72 (search for similar items in EconPapers)
Date: 2000-12-11
Note: Received: October 1998/Final version: May 2000
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Citations: View citations in EconPapers (15)

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