We adopt the largest consistent set defined by Chwe (1994; J. Econ. Theory 63: 299–325) to predict which coalition structures are possibly stable when players are farsighted. We also introduce a refinement, the largest cautious consistent set, based on the assumption that players are cautious. For games with positive spillovers, many coalition structures may belong to the largest consistent set. The grand coalition, which is the efficient coalition structure, always belongs to the largest consistent set and is the unique one (...) to belong to the largest cautious consistent set. (shrink)

We propose the notion of myopic-farsighted absorbing set to determine the networks that emerge in the long run when some players are myopic while others are farsighted. A set of networks is a myopic-farsighted absorbing set if (No External Deviation) there is no myopic-farsighted improving path from networks within the set to some networks outside the set, (External Stability) there is a myopic-farsighted improving path from any network outside the set to some network within the set, and (Minimality) there is (...) no proper subset satisfying No External Deviation and External Stability. Contrary to the notion of myopic-farsighted stable set, we show that a myopic-farsighted absorbing set always exists. We partially characterize the myopic-farsighted absorbing sets and we provide sufficient conditions for the equivalence between a myopic-farsighted absorbing set and a myopic-farsighted stable set. We also introduce and fully characterize the notion of proper myopic-farsighted absorbing set that refines the concept of myopic-farsighted absorbing set by selecting the more absorbing networks. Finally, we consider a threshold game that illustrates the role of the relative number of farsighted and myopic players for reaching efficiency. (shrink)

This paper reconsiders Rubinstein's alternating-offer bargaining game with complete information. We define rationalizability and trembling- hand rationalizability (THR) for multi-stage games with observed actions. We show that rationalizability does not exclude perpetual disagreement or delay, but that THR implies a unique solution. Moreover, this unique solution is the unique subgame perfect equilibrium (SPE). Also, we reconsider an extension of Rubinstein's game where a smallest money unit is introduced: THR rules out the non-uniqueness of SPE in some particular case. Finally, we (...) investigate the assumption of boundedly rational players. Perpetual disagreement is excluded, but not delay. Furthermore, we cannot use the asymmetric Nash bargaining solution as an approximation of the alternating-offer bargaining model once the players are boundedly rational ones. (shrink)