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:
“They roused him with muffins—they roused him with ice—
They roused him with mustard and cress—
They roused him with jam and judicious advice—
They set him conundrums to guess.”
—Lewis Carroll [Charles Lutwidge Dodgson] (1832–1898)