IDEAS home Printed from https://ideas.repec.org/p/clt/sswopa/1150.html
   My bibliography  Save this paper

Endogenous Games and Mechanisms: Side Payments Among Players

Author

Listed:
  • Wilkie, Simon
  • Jackson, Matthew O.

Abstract

We characterize the outcomes of games when players may make binding offers of strategy contingent side payments before the game is played. This does not always lead to efficient outcomes, despite complete information and costless contracting. The characterizations are illustrated in a series of examples, including voluntary contribution public good games, Cournot and Bertrand oligopoly, principal-agent problems, and commons games, among others.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Wilkie, Simon & Jackson, Matthew O., 2002. "Endogenous Games and Mechanisms: Side Payments Among Players," Working Papers 1150, California Institute of Technology, Division of the Humanities and Social Sciences.
    • Handle: RePEc:clt:sswopa:1150
    as

    Download full text from publisher

    File URL: http://www.hss.caltech.edu/SSPapers/sswp1150c.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. (*), Kai A. Konrad & Wolfgang Buchholz & Kjell Erik Lommerud, 1997. "Stackelberg leadership and transfers in private provision of public goods," Review of Economic Design, Springer;Society for Economic Design, vol. 3(1), pages 29-43.
    2. Leslie M. Marx & Steven A. Matthews, 2000. "Dynamic Voluntary Contribution to a Public Project," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(2), pages 327-358.
    3. Guttman, Joel M, 1978. "Understanding Collective Action: Matching Behavior," American Economic Review, American Economic Association, vol. 68(2), pages 251-255, May.
    4. Andreoni,J. & Varian,H., 1999. "Pre-play contracting in the prisoners' dilemma," Working papers 18, Wisconsin Madison - Social Systems.
    5. Varian, H.R., 1989. "Sequential Provision Of Public Goods," Papers 89-17, Michigan - Center for Research on Economic & Social Theory.
    6. Ray, Debraj & Vohra, Rajiv, 1997. "Equilibrium Binding Agreements," Journal of Economic Theory, Elsevier, vol. 73(1), pages 30-78, March.
    7. Bensaid, Bernard & Gary-Bobo, Robert J., 1996. "An Exact Formula for the Lion's Share: A Model of Preplay Negotiation," Games and Economic Behavior, Elsevier, vol. 14(1), pages 44-89, May.
    8. Fershtman, Chaim & Nitzan, Shmuel, 1991. "Dynamic voluntary provision of public goods," European Economic Review, Elsevier, vol. 35(5), pages 1057-1067, July.
    9. Fershtman, Chaim & Judd, Kenneth L & Kalai, Ehud, 1991. "Observable Contracts: Strategic Delegation and Cooperation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(3), pages 551-559, August.
    10. Anderlini, Luca & Felli, Leonardo, 2001. "Costly Bargaining and Renegotiation," Econometrica, Econometric Society, vol. 69(2), pages 377-411, March.
    11. B. Douglas Bernheim & Michael D. Whinston, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(1), pages 1-31.
    12. Anat R. Admati & Motty Perry, 1991. "Joint Projects without Commitment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 259-276.
    13. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    14. McAfee, R Preston, 1993. "Mechanism Design by Competing Sellers," Econometrica, Econometric Society, vol. 61(6), pages 1281-1312, November.
    15. Ehud Kalai & Dov Samet, 1983. "Unanimity Games and Pareto Optimality," Discussion Papers 546, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    16. Andrea Prat & Aldo Rustichini, 2003. "Games Played Through Agents," Econometrica, Econometric Society, vol. 71(4), pages 989-1026, July.
    17. Miller, Nolan H & Pazgal, Amit I, 2001. "The Equivalence of Price and Quantity Competition with Delegation," RAND Journal of Economics, The RAND Corporation, vol. 32(2), pages 284-301, Summer.
    18. Aghion, Philippe & Bolton, Patrick, 1987. "Contracts as a Barrier to Entry," American Economic Review, American Economic Association, vol. 77(3), pages 388-401, June.
    19. Matthew O. Jackson, 2001. "A crash course in implementation theory," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 18(4), pages 655-708.
    20. Ilya Segal, 1999. "Contracting with Externalities," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(2), pages 337-388.
    21. repec:bla:econom:v:54:y:1987:i:213:p:1-19 is not listed on IDEAS
    22. Leonid Hurwicz, 1994. "Economic design, adjustment processes, mechanisms, and institutions," Review of Economic Design, Springer;Society for Economic Design, vol. 1(1), pages 1-14, December.
    23. Lagunoff, Roger, 1992. "Fully Endogenous Mechanism Selection on Finite Outcome Sets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 2(4), pages 465-480, October.
    24. Kalai, Ehud, 1981. "Preplay negotiations and the prisoner's dilemma," Mathematical Social Sciences, Elsevier, vol. 1(4), pages 375-379, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Han, Seungjin, 2006. "Menu theorems for bilateral contracting," Journal of Economic Theory, Elsevier, vol. 131(1), pages 157-178, November.
    2. Martimort David & Stole Lars, 2003. "Contractual Externalities and Common Agency Equilibria," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 3(1), pages 1-40, July.
    3. Valentin Goranko & Paolo Turrini, 2016. "Two-Player Preplay Negotiation Games with Conditional Offers," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 18(01), pages 1-31, March.
    4. Didier Laussel & Thomas R. Palfrey, 2003. "Efficient Equilibria in the Voluntary Contributions Mechanism with Private Information," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 5(3), pages 449-478, July.
    5. Ernesto Dal Bo, 2000. "Bribing Voters," Economics Series Working Papers 39, University of Oxford, Department of Economics.
    6. Kim Geofferey Jiyun & Kim Bara, 2018. "Symmetric Equilibria in a Cost-Averting War of Attrition Requiring Minimum Necessary Conceders," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 18(1), pages 1-9, January.
    7. Bontems, Philippe & Cheikbossian, Guillaume & Hafidi, Houda, 2024. "Environmental Tax Competition and Welfare: The Good News about Lobbies," TSE Working Papers 24-1551, Toulouse School of Economics (TSE).
    8. Leslie M. Marx & Steven A. Matthews, 2000. "Dynamic Voluntary Contribution to a Public Project," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(2), pages 327-358.
    9. Alwine Mohnen & Kathrin Pokorny & Dirk Sliwka, 2008. "Transparency, Inequity Aversion, and the Dynamics of Peer Pressure in Teams: Theory and Evidence," Journal of Labor Economics, University of Chicago Press, vol. 26(4), pages 693-720, October.
    10. May Elsayyad & Florian Morath, 2016. "Technology Transfers For Climate Change," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 57(3), pages 1057-1084, August.
    11. Amihai Glazer & Stef Proost, 2017. "Free riding on successors, delay, and extremism," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 48(4), pages 887-900, April.
    12. Aghamolla, Cyrus & Hashimoto, Tadashi, 2020. "Information arrival, delay, and clustering in financial markets with dynamic freeriding," Journal of Financial Economics, Elsevier, vol. 138(1), pages 27-52.
    13. Georgiadis, George, 2017. "Deadlines and infrequent monitoring in the dynamic provision of public goods," Journal of Public Economics, Elsevier, vol. 152(C), pages 1-12.
    14. Adam Tauman Kalai & Ehud Kalai & Dov Samet, 2007. "Voluntary Commitments Lead to Efficiency," Discussion Papers 1444, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    15. Francisco Cabo & Mabel Tidball, 2022. "Cooperation in a Dynamic Setting with Asymmetric Environmental Valuation and Responsibility," Dynamic Games and Applications, Springer, vol. 12(3), pages 844-871, September.
    16. Hans Gersbach & Noemi Hummel & Ralph Winkler, 2011. "Sustainable Climate Treaties," Diskussionsschriften dp1105, Universitaet Bern, Departement Volkswirtschaft.
    17. Ledyard, John O., "undated". "Public Goods: A Survey of Experimental Research," Working Papers 861, California Institute of Technology, Division of the Humanities and Social Sciences.
    18. Altınok, Ahmet & Yılmaz, Murat, 2018. "Dynamic voluntary contribution to a public project under time inconsistency," Journal of Economic Behavior & Organization, Elsevier, vol. 145(C), pages 114-140.
    19. T. Renee Bowen & George Georgiadis & Nicolas S. Lambert, 2019. "Collective Choice in Dynamic Public Good Provision," American Economic Journal: Microeconomics, American Economic Association, vol. 11(1), pages 243-298, February.
    20. Matthew O. Jackson, 2001. "A crash course in implementation theory," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 18(4), pages 655-708.

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:clt:sswopa:1150. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Victoria Mason (email available below). General contact details of provider: http://www.hss.caltech.edu/ss .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.