A Social Choice Rule and its Implementation in Perfect Equilibrium (Now published in Journal of Economic Theory, 56 (1992), pp.142-159.)

Abstract A finite number of people have available a set of alternatives. We propose a particular lottery over these alternatives as a reasonable solution to the decision problem, namely the generalized Nash bargaining solution relative to a “random dictator” status quo point. This is well defined whenever each player has a unique best alternative. We show that this social choice rule can be implemented as the unique perfect equilibrium outcome of a game of perfect information with a finite number of stages and no chance moves. This also shows that the generalized Nash bargaining solution can be so implemented.

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