A natural extension of superadditivity is not sufficient to imply that the grand coalition is efficient when externalities are present. We provide a condition, analogous to convexity, that is sufficient for the grand coalition to be efficient and show that this also implies that the (appropriately defined) core is nonempty. Moreover, we propose a mechanism which implements the most efficient pa...

We analyze the Nash equilibria of a standard Bertrand model. We show that in addition to the marginal-cost pricing equilibrium there is a possibility for mixed-strategy equilibria yielding positive profit levels. We characterize these equilibria and find that having unbounded revenues is the necessary and sufficient condition for their existence. Hence, we demonstrate that under realistic assum...

Stackelberg-like games show a situation where there is a clear advantage in moving …rst. In a thought provoking article, Bagwell (1995) shows that this advantage may not be robust against imperfect observations of the …rst move. We explore these ideas in the context of forward induction in three classic games, namely, the outside option game, the game of burning a dollar before the battle of th...

We study the stabilitywith respect to the introduction of opportunitybased inequity aversion a la Dufwenberg et al. (2011) of three welfare properties satisfiedbycompetitive equilibria in self-regarding economies: (i) Pareto efficiencymay not be a stable property; (ii) undomination with respect to income redistribution is a stablepropertywhenever themarginal indirect utility of income has no ex...

In a (generalized) symmetric aggregative game, payoffs depend only on individual strategy and an aggregate of all strategies. Players behaving as if they were negligible would optimize taking the aggregate as given. We provide evolutionary and dynamic foundations for such behavior when the game satisfies supermodularity conditions. The results obtained are also useful to characterize evolutiona...

This note introduces a model of contests with random noise and a shared prize that combines features of Tullock (1980) and Lazear and Rosen (1981). Similar to results in Lazear and Rosen, as the level of noise decreases the equilibrium effort rises. As the noise variance approaches zero, the equilibrium effort of the shared-prize contest approaches that of a Tullock lottery contest. JEL Classif...

Under study are games in which players receive private signals and then simultaneously choose actions from compact sets. Payoffs are measurable in signals and jointly continuous in actions. This paper gives a counter-example to the main step in Cotter’s [K. Cotter, Correlated equilibrium in games with typedependent strategies, J. Econ. Theory 54 (1991) 48–69] argument for correlated equilibrium...

We give an axiomatic characterization of the Time-Preference Nash Solution, a bargaining solution that is applied when the underlying preferences are defined over streams of physical outcomes. This bargaining solution is similar to the ordinal Nash solution introduced by Rubinstein, Safra, and Thomson (1992), but it gives a different prediction when the set of physical outcomes is a set of lott...

We analyze a Colonel Blotto game in which opposing parties have di¤ering relative intensities (i.e. the game is non-zero sum). We characterize the colonels’ payo¤s that sustain a pure strategy equilibrium and present an algorithm that reaches the equilibrium actions (when they exist). Finally we show that the set of games with a pure strategy equilibria is non-empty. JEL Classi…cation: C72, D7,...

We prove that there exist social choice correspondences that can be implemented in undominated strategies, using finite mechanisms, but can require arbitrarily many strategies to do so, even when there are only two agents and two types of each agent. This is in sharp contrast with dominant-strategy implementation, where the revelation principle implies that only one strategy for each type of ag...