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:
“In public buildings set aside for the care and maintenance of the goods of the middle ages, a staff of civil service art attendants praise all the dead, irrelevant scribblings and scrawlings that, at best, have only historical interest for idiots and layabouts.”
—George Grosz (1893–1959)