A commitment folk theorem

Adam Tauman Kalai*, Ehud Kalai, Ehud Lehrer, Dov Samet

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

28 Scopus citations

Abstract

Real world players often increase their payoffs by voluntarily committing to play a fixed strategy, prior to the start of a strategic game. In fact, the players may further benefit from commitments that are conditional on the commitments of others.This paper proposes a model of conditional commitments that unifies earlier models while avoiding circularities that often arise in such models.A commitment folk theorem shows that the potential of voluntary conditional commitments is essentially unlimited. All feasible and individually rational payoffs of a two-person strategic game can be attained at the equilibria of one (universal) commitment game that uses simple commitment devices. The commitments are voluntary in the sense that each player maintains the option of playing the game without commitment, as originally defined.

Original languageEnglish (US)
Pages (from-to)127-137
Number of pages11
JournalGames and Economic Behavior
Volume69
Issue number1
DOIs
StatePublished - May 2010

Keywords

  • C70

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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