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Sequential Commitment Games

31 Pages Posted: 2 Jun 2015 Last revised: 15 Dec 2015

Itai Arieli

Technion-Israel Institute of Technology

Yakov Babichenko

Technion, Industrial Engineering and Managemenet

Moshe Tennenholtz

Technion-Israel Institute of Technology - The William Davidson Faculty of Industrial Engineering & Management

Date Written: December 10, 2015

Abstract

We consider extensive-form games in which players have the option to commit to actions before the game is played. We focus on commitment procedures where players make voluntary irreversible commitments in a prescribed order over the decision nodes. We study whether such commitment procedures may lead to Pareto-efficient outcomes. Our main positive result is surprisingly positive:For two-player games, we introduce an order over the decision nodes for which the unique sub-game perfect equilibrium outcome is Pareto efficient regardless of the actual payoffs. We show an impossibility result for games with four players.

Keywords: Commitment Game, Extensive-form Games, Pareto Efficiency

JEL Classification: C72, D80

Suggested Citation

Arieli, Itai and Babichenko, Yakov and Tennenholtz, Moshe, Sequential Commitment Games (December 10, 2015). Available at SSRN: https://ssrn.com/abstract=2613019 or http://dx.doi.org/10.2139/ssrn.2613019

Itai Arieli (Contact Author)

Technion-Israel Institute of Technology ( email )

Technion City
Haifa 32000, Haifa 32000
Israel

Yakov Babichenko

Technion, Industrial Engineering and Managemenet ( email )

Hiafa, 3434113
Israel

Moshe Tennenholtz

Technion-Israel Institute of Technology - The William Davidson Faculty of Industrial Engineering & Management ( email )

Bloomfield-312
Haifa 32000
Israel
972-4-829 4419 (Phone)

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