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A Note on Rational Threats and Competitive Equilibrium

Reinganum, Jennifer F. (1980) A Note on Rational Threats and Competitive Equilibrium. Social Science Working Paper, 297. California Institute of Technology , Pasadena, CA. (Unpublished)

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Many economic problems can be modeled as n-person non-zero sum games. In such situations, there are gains to be had by coordination of strategies. Assuming there are no restrictions on side-payments, the players then bargain over the division of the gains. This note establishes that, for a restricted class of economic problems, the threat equilibrium in the bargaining game coincides with the perfectly competitive equilibrium.

Item Type:Report or Paper (Working Paper)
Additional Information:Revised. Original dated to January 1980. The games described in this note are not repeated games; they are “one shot” games which may depend on the evolution of an economic variable (or stock) through time. Thus, this result has nothing to do with (and claims no applicability to) the repeated games problems.
Group:Social Science Working Papers
Series Name:Social Science Working Paper
Issue or Number:297
Record Number:CaltechAUTHORS:20171013-145934785
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:82349
Deposited By: Jacquelyn Bussone
Deposited On:16 Oct 2017 18:32
Last Modified:03 Oct 2019 18:53

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