Harsanyi and Selten (1988) have proposed a theory of equilibrium selection that selects a unique Nash equilibrium for any non-cooperative N-person game. The heart of their theory is given by the tracing procedure, a mathematical construction that adjusts arbitrary prior beliefs into equilibrium...

The literature on the computation of Nash equilibria in n-person games is dominated by simplicial methods. This paper is the first to introduce a globally convergent algorithm that fully exploits the differentiability present in the problem. It presents an everywhere differentiable homotopy to...

Using a non cooperative climate policy game applied in the literature, we find that an agreement with international emissions trading leads to increased emissions and reduced efficiency.

In the last two decades or so, a significant emphasis of the research literature in operations management has been on the strategic interaction of firms in a supply chain. Individual firms in supply chains make decisions on multiple levers such as capacity, inventory and price, to name a few,...

This paper investigates the usefulness of non-cooperative bargaining theory for the analysis of negotiations on water allocation and management. It explores the impacts of different economic incentives, of a stochastic environment and of varying individual preferences on players' strategies and...

In this chapter we give an overview on the theory of noncooperative games. In the first part we consider in detail for zero-sum (and constant-sum) noncooperative games under which necessary and sufficient conditions on the payoff function and different (extended) strategy sets for both players...

The paper purports to stress how the two major contributions of Bacharach: "Variable Frame Theory" (VFT) and "Team Reasoning" (TR) improve Standard Non-Cooperative Game Theory in some relevant aspects which I point out. The aims are to show: (i) how Bacharach respectively justifies coordination...

Among the recent innovative strategies for coping with product variety and market risk some firms have partnered to leverage economies of scale and risk pooling by sharing manufacturing capacity. In this paper we study how to structure such a joint venture to achieve full efficiency at low...

China's natural gas demand is expected to grow rapidly in the coming decades. Therefore the potential of several pipelines from Russia and other CIS countries to China has been investigated. A two-step game-theoretic procedure for the problem formulation is proposed to assess the projects'...

Often, perfect Bayesian equilibrium is loosely defined by stating that players should be sequentially rational given some beliefs in which Bayes rule is applied “whenever possible.” We argue that there are situations in which it is not clear what “whenever possible” means. Then we...