Choice behavior is rational if it is based on the maximization of some context-independent preference relation. This study re-examines the questions of implementation theory in a setting where players’ choice behavior need not be rational and coalition formation must be taken into account. Our...

A social choice rule (SCR) $F$ maps preference profiles to lotteries over some finite set of outcomes. $F$ is virtually implementable in (pure and mixed) Nash equilibria provided that for all $\epsilon 0$, there exists a mechanism such that for each preference profile $\theta$, its set of Nash...

We incorporate the extended version of Nash bargaining proposed by Vartiainen (2007) in a standard labour search and matching model to endogenously determine the outside option of workers along with their wages. We find that the optimal outside option of a worker under this framework is zero and...