EC516 Contracts and Organisations, LSE 3. Lecture Notes on Binding Agreements Debraj Ray 1. Coalition Formation in Symmetric Games
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چکیده
1.1. Standard Equilibrium and the Algorithm. This is the theorem with which we ended the previous lecture: Theorem 1. There exists δ∗ ∈ (0, 1) such that for all δ ∈ (δ∗, 1), any standard equilibrium must be of the following form. At a stage in which any substructure π has left the game (with associated numerical substructure n), the next coalition that forms is of size t(n) and the payoff to a proposer is
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EC516 Contracts and Organisations, LSE 2. Lecture Notes on Binding Agreements
Von Neumann and Morgenstern’s characteristic function tells us that if this firm breaks off, it should anticipate whatever it is that the other firms can hold it down to. But this last number is zero, for it is certainly the case that the other two firms can flood the market and drive prices down to zero. So the characteristic function predicts that our firm should not object to any nonnegative...
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In these notes we provide some supplementary results and discussion not included in the main text of the paper. In particular, we provide a proof of the existence of a Markovian equilibrium, the proof of Proposition 3, some examples for three-player games and further discussion of the efficiency result. We also provide the proof of the four player inefficiency example and construct an equilibri...
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Consider an environment with widespread externalities, and suppose that binding agreements can be written. We study coalition formation in such a setting. Our analysis proceeds by defining on a partition function an extensive-form bargaining game. We establish the existence of a stationary subgame perfect equilibrium for such a game. Our main results are concerned with the characterization of e...
متن کاملBinding Agreements II: Coalition Formation
The bargaining approach can be usefully applied to address some classical questions in cooperative game theory. One of these concerns the formation of coalitions and the writing of binding agreements among groups of players. Many years ago, Ronald Coase argued that such negotiations would invariably end in an efficient outcome, and that bargaining power — whatever that is — would be reflected i...
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تاریخ انتشار 2005