Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/73906 
Year of Publication: 
2006
Series/Report no.: 
Nota di Lavoro No. 75.2006
Publisher: 
Fondazione Eni Enrico Mattei (FEEM), Milano
Abstract: 
We consider non-cooperative environments in which two players have the power to commit but cannot sign binding agreements. We show that by committing to a set of actions rather than to a single action, players can implement a wide range of action profiles. We give a complete characterization of implementable profiles and provide a simple method to find them. Profiles implementable by bilateral commitments are shown to be generically inefficient. Surprisingly, allowing for gradualism (i.e., step by step commitment) does not change the set of implementable profiles.
Subjects: 
Commitment
Self-enforcing
Treaties
Inefficiency
Agreements
Pareto-improvement
JEL: 
C70
C72
H87
Document Type: 
Working Paper

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