DOI link to open access article:
On non-cooperative foundation and implementation of the Nash solution in subgame perfect equilibrium via Rubinstein's game
Papatya Duman, Walter Trockel
Journal of Mechanism and Institution Design
Volume 1, issue 1, pages 83-107 (December 2016)
In this paper we provide an exact non-cooperative foundation of the Nash solution via a unique (weakly) subgame perfect equilibrium payoff vector in a two-person bargaining game, which is a modification of the well-know nalternate offer game by Rubinstein (1982). We also discuss the extent to which our exact and approximate supports of the Nash solution allow an implementation of the Nash solution in (weakly) subgame perfect equilibrium. We show that a sound interpretation as an implementation can only be found in very rare cases where the domains of players' preferences are extremely restricted.
Keywords: Nash program, Non-cooperative foundation, Implementation.
JEL Classification Numbers: C7, C71, C72.