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Negotiation-proof Nash equilibrium

Author

Listed:
  • Licun Xue

    (Department of Economics, University of Aarhus, DK-8000 Aarhus C, Denmark)

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.

Suggested Citation

  • Licun Xue, 2000. "Negotiation-proof Nash equilibrium," International Journal of Game Theory, Springer;Game Theory Society, vol. 29(3), pages 339-357.
    • Handle: RePEc:spr:jogath:v:29:y:2000:i:3:p:339-357
    Note: Received: October 1998/Final version: May 2000
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    Citations

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    Cited by:

    1. Takashi Kamihigashi & Kerim Keskin & Çağrı Sağlam, 2021. "Organizational refinements of Nash equilibrium," Theory and Decision, Springer, vol. 91(3), pages 289-312, October.
    2. Bardhan, Pranab & Singh, Nirvikar, 2004. "Inequality, Coalitions and Collective Action," Santa Cruz Department of Economics, Working Paper Series qt1mg8p7tc, Department of Economics, UC Santa Cruz.
    3. Nicholas Ziros, 2011. "Negotiation-proof correlated equilibrium," University of Cyprus Working Papers in Economics 14-2011, University of Cyprus Department of Economics.
    4. Page, Frank Jr. & Wooders, Myrna H. & Kamat, Samir, 2005. "Networks and farsighted stability," Journal of Economic Theory, Elsevier, vol. 120(2), pages 257-269, February.
    5. Nessah, Rabia & Tazdaı¨t, Tarik, 2013. "Absolute optimal solution for a compact and convex game," European Journal of Operational Research, Elsevier, vol. 224(2), pages 353-361.
    6. R. R. Routledge, 2013. "On the existence of coalition-proof Bertrand equilibrium," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 1(1), pages 21-31, May.
    7. Nikolaj Malchow-Moeller & Bo Jellesmark Thorsen, "undated". "A Dynamic Agricultural Household Model with Uncertain Income and Irreversible and Indivisible Investments under Credit Constraints," Economics Working Papers 2000-7, Department of Economics and Business Economics, Aarhus University.
    8. Routledge R. R., 2012. "On Communication and the Weak Sequential Core," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 12(1), pages 1-22, September.
    9. Heller, Yuval, 2008. "Ex-ante and ex-post strong correlated equilbrium," MPRA Paper 7717, University Library of Munich, Germany, revised 11 Mar 2008.
    10. Daniel Granot & Greys Sov{s}i'{c}, 2005. "Formation of Alliances in Internet-Based Supply Exchanges," Management Science, INFORMS, vol. 51(1), pages 92-105, January.

    More about this item

    Keywords

    coalition; negotiation; Nash equilibrium; self-enforcing agreement; perfect foresight;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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