Proper equilibrium plays a prominent role in the literature on non-cooperative games. The underlying thought experiment is, however, unsatisfying, as it gives no justification for its fundamental idea that severe mistakes are made with a significantly smaller probability than innocuous ones. In...

This paper analyses the role of transfer payments and strategic con tracting within two-person strategic form games with monetary pay-offs. First, it introduces the notion of transfer equilibrium as a strategy combination for which individual stability can be supported by allowing the...

The concept of Berge equilibria is based on supportive behavior among the players: each player is supported by the group of all other players. In this paper, we extend this concept by maintaining the idea of supportive behavior among the players, but eliminating the underlying coordination...