We consider how the political system of the state evolves in the process of economic development. We present a dynamic public goods economy with non-overlapping generations, which confronts the free-rider problem without the state. In each generation, individuals enter under the unanimous rule a...

We investigate international negotiations on CO2 emissions reduction in the Kyoto Protocal by non-cooperative multilateral bargaining theory. The negotiation model has two phases, (i) allocating emission reductions to countries and (ii) international emissions trading. Anticipating the...

Centralized sanctioning institutions are of utmost importance for overcoming free-riding tendencies and enforcing outcomes that maximize group welfare in social dilemma situations. However, little is known about how such institutions come into existence. In this paper we investigate, both...

Game theory presents a useful analytical tool for addressing the problem of international cooperation and the formation of institutions. We first examine four problems that must be solved to achieve international cooperation: the common knowledge problem, agreement problem, compliance problem,...

This paper reports the results of experiments involving a 3-personcoalitionformation game with an ultimatumbargaining character. The grand coalition was always the efficientcoalition,whereas the values of the 2-personcoalitions are varied such that they lead to an efficiency loss inthe range...

This paper reports the results of a cross-country comparison between Austria andJapan for an experimental 3-personcoalition formation ultimatum game. The experimental design allows thecomparison with respect to three decisions. (i)The coalition decision, (ii) proposers' demand behavior in 2- and...

Based on recent developments in non-cooperative coalitional bargaining theory, I review game theoretical analyses of cooperation and institution. The first part presents basic results of the random-proposer model and applies them to the problem of involuntary unemployment in a labor market....

We consider dynamic group formation in repeated n-person prisonerʼs dilemma. Agreements in coalitional bargaining are self-binding in that they are supported as subgame perfect equilibria of repeated games. Individuals are allowed to renegotiate the cooperating group agreement through a process...