Fall back equilibrium is a refinement of the Nash equilibrium concept. In the underlying thought experiment each player faces the possibility that, after all players decided on their action, his chosen action turns out to be blocked. Therefore, each player has to decide beforehand on a back-up...

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...