Bade, Sophie and Haeringer, Guillaume and Renou, Ludovic (2006) Bilateral Commitment. Working Paper. University of Adelaide School of Economics Working Papers.
Bade, Sophie and Haeringer, Guillaume and Renou, Ludovic (2006) Bilateral Commitment. Working Paper. University of Adelaide School of Economics Working Papers.
Bade, Sophie and Haeringer, Guillaume and Renou, Ludovic (2006) Bilateral Commitment. Working Paper. University of Adelaide School of Economics Working Papers.
Abstract
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.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Uncontrolled Keywords: | commitment; self-enforcing; treaties; inefficiency; agreements; Pareto-improvement |
| Subjects: | H Social Sciences > HB Economic Theory |
| Divisions: | Faculty of Social Sciences > Economics, Department of |
| Depositing User: | Jim Jamieson |
| Date Deposited: | 07 Jan 2013 12:22 |
| Last Modified: | 07 Jan 2013 12:22 |
| URI: | http://repository.essex.ac.uk/id/eprint/5014 |