JOINT BELIEFS IN CONFLICTUAL COORDINATION GAMES

The traditional solution concept for noncooperative game theory is the Nash equilibrium, which contains an implicit assumption that players' probability distributions satisfy probabilistic independence. However , in games with more than two players, relaxing this assumption result s in a more general equilibrium concept based on joint beliefs (Vander schraaf, 1995). This article explores the implications of this joint-b eliefs equilibrium concept for two kinds of conflictual coordination g ames: crisis bargaining and public goods provision. We find that, usin g updating consistent with Bayes' rule, players' beliefs converge to e quilibria in joint beliefs which do not satisfy probabilistic independ ence. In addition, joint beliefs greatly expand the set of mixed equil ibria. On the face of it, allowing for joint beliefs might be expected to increase the prospects for coordination. However, we show that if players use joint beliefs, which may be more likely as the number of p layers increases, then the prospects for coordination in these games d eclines vis-a-vis independent beliefs.