ON IMPLEMENTATION VIA DEMAND COMMITMENT GAMES

A simple version of the Demand Commitment Game is shown to implement t he Shapley value as the unique subgame perfect equilibrium outcome for any n-person characteristic function game. This improves upon previou s models devoted to this implementation problem in terms of one or mor e of the following: a) the range of characteristic function games addr essed, b) the simplicity of the underlying noncooperative game tit is a finite horizon game where individuals make demands and form coalitio ns rather than make comprehensive allocation proposals and c) the gene ral acceptability of the noncooperative equilibrium concept. A complet e characterization of an equilibrium strategy generating the Shapley v alue outcomes is provided. Furthermore, for 3 player games, it is show n that the Demand Commitment Game can implement the core for games whi ch need not be convex but have cores with nonempty interiors.