Template-Type: ReDIF-Paper 1.0 Series: Tinbergen Institute Discussion Papers Creation-Date: 2012-05-07 Number: 12-050/1 Author-Name: Rene van den Brink Author-Workplace-Name: VU University Amsterdam Author-Name: Gerard van der Laan Author-Workplace-Name: VU University Amsterdam Author-Name: Nigel Moes Author-Workplace-Name: VU University Amsterdam Title: A Strategic Implementation of the Average Tree Solution for Cycle-Free Graph Games Abstract: This discussion paper led to a publication in the 'Journal of Economic Theory', 2014, 148, 2737-2748.
In this note we provide a strategic implementation of the average tree solution for zero-monotonic cycle-free graph games. That is, we propose a non-cooperative mechanism of which the unique subgame perfect equilibrium payoffs correspond to the average hierarchical outcome of the game. This mechanism takes into account that a player is only able to communicate with other players (i.e., to make proposals about a division of the surplus of cooperation) when they are connected in the graph. Classification-JEL: C71, C72 Keywords: implementation, cycle-free graph game, tree game, hierarchical outcome, average tree solution, weighted hierarchical outcome File-Url: http://papers.tinbergen.nl/12050.pdf File-Format: application/pdf File-Size: 346141 bytes Handle: RePEc:tin:wpaper:20120050