An Implementation-Theoretic Approach to Non-cooperative Foundations

Abstract

The goal of non-cooperative foundations is to provide credible non-cooperative models of negotiation and coalition formation whose equilibrium outcomes agree with a given cooperative solution. Here we argue that this goal is best achieved by explicitly modeling the physical environment and individual preferences, and by constructing game forms independent of preferences to implement the cooperative solution. We propose a general model of the physical environment; we characterize the coalitional functions arising from environments viaα- andβ-effectivity; and we take up an issue of “payoff consistency” with special reference to the core.Journal of Economic LiteratureClassification Numbers: C71, C72, C78.