Holding a Group Together: Non-Game Theory Versus Game Theory

Michael Richter*, Ariel Rubinstein

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

Each member of a group chooses a position and has preferences regarding his chosen position. The group's harmony depends on the profile of chosen positions meeting a specific condition. We analyse a solution concept (Richter and Rubinstein, 2020) based on a permissible set of individual positions, which plays a role analogous to that of prices in competitive equilibrium. Given the permissible set, members choose their most preferred position. The set is tightened if the chosen positions are inharmonious and relaxed if the restrictions are unnecessary. This new equilibrium concept yields more attractive outcomes than does Nash equilibrium in the corresponding game.

Original languageEnglish
Pages (from-to)2629-2641
Number of pages13
JournalEconomic Journal
Volume131
Issue number638
DOIs
StatePublished - 1 Aug 2021

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