Bilateral Commitment

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Nota di Lavoro ; No. 75.2006

Classification and Topics

• Classification: Wirtschaft ; Game Theory and Bargaining Theory: General ; Noncooperative Games ; International Fiscal Issues; International Public Goods
• Subject: Commitment ; Self-enforcing ; Treaties ; Inefficiency ; Agreements ; Pareto-improvement ; Kooperatives Spiel ; Dynamisches Spiel ; Nash-Gleichgewicht ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Haeringer, Guillaume ; Bade, Sophie ; Renou, Ludovic
• Event: Veröffentlichung
• (who): Fondazione Eni Enrico Mattei (FEEM)
• (where): Milano
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/73906
• Last update: 10.03.2025, 11:42 AM CET