On implementation via demand commitment games

On implementation via demand commitment games

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Article ID: iaor19992505
Country: Germany
Volume: 27
Issue: 2
Start Page Number: 161
End Page Number: 189
Publication Date: Jan 1998
Journal: International Journal of Game Theory
Authors: ,
Abstract:

A simple version of the Demand Commitment Game is shown to implement the Shapley value as the unique subgame perfect equilibrium outcome for any n-person characteristic function game. This improves upon previous models devoted to this implementation problem in terms of one or more of the following: (a) the range of characteristic function games addressed, (b) the simplicity of the underlying noncooperative game (it is finite horizon game where individuals make demands and form coalitions rather than make comprehensive allocation proposals and (c) the general acceptability of the noncooperative equilibrium concept. A complete characterization of an equilibrium strategy generating the Shapley value outcomes is provided. Furthermore, for 3-player games, it is shown that the Demand Commitment Game can implement the core for games which need not be convex but have cores with nonempty interiors.

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