Feasibility Set
Which agreements are feasible depends on whether bargaining is mediated by an additional party. When binding contracts are allowed, any joint action is playable, and the feasibility set consists of all attainable payoffs better than the disagreement point. When binding contracts are unavailable, the players can defect (moral hazard), and the feasibility set is composed of correlated equilibria, since these outcomes require no exogenous enforcement.
Read more about this topic: Bargaining Problem, Formal Description
Famous quotes containing the word set:
“Scholarship cannot do without literature.... It needs literature to float it, to set it current, to authenticate it to all the race, to get it out of closets and into the brains of men who stir abroad.”
—Woodrow Wilson (1856–1924)