In this paper, we suggest a simple sequential mechanism whose subgame perfect equilibria give rise to efficient networks. Moreover, the payoffs received by the agents coincide with their Shapley value in an appropriately defined cooperative game.

The Serial Cost Sharing Rule has been conceived originally for problems where agents ask for different quantities of an homogeneous private good, the sum of which is produced by a single facility. Two important features of this rule is the equal treatment of equal demands and the protection it...

The 2016 Nobel Memorial Prize in Economic Sciences was awarded to Oliver Hart and Bengt Holmström for their work on contract theory. Contract theory is a subfield of game theory where the conflict between the owner - the principal - and the CEO - or agent - is at the centre of interest. In the...

The 2016 Nobel Memorial Prize in Economic Sciences was awarded to Oliver Hart and Bengt Holmström for their work on contract theory. Contract theory is a subfield of game theory where the conflict between the owner - the principal - and the CEO - or agent - is at the centre of interest. In the...

We examine the incentives of an interest group to provide a political decision-maker with policy-relevant information and to exert pressure on her. Both activities are costly but may induce the lobby's preferred policy. Our paper provides an integrated analysis of both lobbying activities and...

In this paper, the authors characterize belief-free equilibria in infinitely repeated games with incomplete information with N \ge 2 players and arbitrary information structures. This characterization involves a new type of individual rational constraint linking the lowest equilibrium payoffs...

The importance and the impacts of horizontal multinational corporations in the context of integration and economic growth processes are examined. A noncooperative game with two firms that choose to have either one or two plants located in two asymmetric countries is used. The firms compete...

This paper uses the complexity of non-competitive behaviour to provide a new justification for competitive equilibrium in the context of extensive-form market games with a finite number of agents. This paper demonstrates that if rational agents have (at least at the margin) an aversion for...