Bilateral Commitment

Sophie Bade, Guillaume Haeringer and Ludovic Renou

No 12160, Coalition Theory Network Working Papers from Fondazione Eni Enrico Mattei (FEEM)

Abstract: We consider non-cooperative environments in which two players have the power to commit but cannot sign binding agreements. We show that by committing to a set of actions rather than to a single action, players can implement a wide range of action profiles. We give a complete characterization of implementable profiles and provide a simple method to find them. Profiles implementable by bilateral commitments are shown to be generically inefficient. Surprisingly, allowing for gradualism (i.e., step by step commitment) does not change the set of implementable profiles.

Keywords: Institutional; and; Behavioral; Economics (search for similar items in EconPapers)
Pages: 48
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Bilateral commitment (2009)
Working Paper: Bilateral Commitment (2008)
Working Paper: Bilateral Commitment (2006)
Working Paper: Bilateral Commitment (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:feemct:12160

DOI: 10.22004/ag.econ.12160

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