A game of threats on a finite set of players, N, is a function d that assigns a real number to any coalition, S ⊆ N, such that d(S) = -d(N\S). A game of threats is not necessarily a coalitional game as it may fail to satisfy the condition d(Ø) = 0. We show that analogs of the classic Shapley...

This chapter examines the conceptual foundations of the concept of strategic equilibrium and its various variants and refinements. The emphasis is very much on the underlying ideas rather than on any technical details.After an examination of some pre-equilibrium ideas, in particular the concept...

This business problem for microeconomic students might be used as part of a problem set or as a take-home exam. It highlights the importance of marginal analysis, and the implications of the fact that rational individuals will undertake the most cost-effective measures first