We construct a market based mechanism that induces players in a non-cooperative game to make the same choices as characterize cooperation. We then argue that this mechanism is applicable to a wide range of economic questions and illustrate this claim using the problems of "The Tragedy of the...

This paper analyses the role of transfer payments and strategic con tracting within two-person strategic form games with monetary pay-offs. First, it introduces the notion of transfer equilibrium as a strategy combination for which individual stability can be supported by allowing the...