Which Acceptable Agreements are Equilibria?

Sylvie Thoron

No 204, Royal Economic Society Annual Conference 2003 from Royal Economic Society

Abstract: I propose a normal form game of agreement formation in which each player's strategy is to say for each size of agreement whether it is acceptable or not. I propose a refinement, which guarantees that each one of these choices is self-enforcing. For general payoff functions, which exhibit positive externalities, I analyse situations in which symmetric players have the possibility to reach a unique agreement. I prove the uniqueness of this equilibrium. I give two specific examples: a cartel and an agreement to contribute to a public good.

Keywords: coalition formation; normal form games; agreement; cartel; environmental agreement; public good (search for similar items in EconPapers)
JEL-codes: C70 C72 (search for similar items in EconPapers)
Date: 2003-06-04
New Economics Papers: this item is included in nep-gth and nep-net
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Journal Article: Which acceptable agreements are equilibria? (2004)
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