Abstract.
This paper defines “negotiation-proof Nash equilibrium'', a notion that applies to environments where players can negotiate openly and directly prior to the play of a noncooperative game. It recognizes the possibility that a group of self-interested players may choose, voluntarily and without binding agreement, to coordinate their choice of strategies and make joint objections; moreover, it takes the perfect foresight of rational players fully into account. The merit of the notion of negotiation-proof Nash equilibrium is twofold: (1) It offers a way to rectify the nestedness assumption and myopia embedded in the notion of coalition-proof Nash equilibrium. (2) The negotiation process is formalized by a “graph”, which serves as a natural extension to the approach that models preplay communication by an extensive game.
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Received: October 1998/Final version: May 2000
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Xue, L. Negotiation-proof Nash equilibrium. Game Theory 29, 339–357 (2000). https://doi.org/10.1007/s001820000044
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DOI: https://doi.org/10.1007/s001820000044