ABSTRACT
Although the classical solution concepts have proved interesting and useful, they also presented problems, which provided the impetus for the construction of alternative conceptualizations of stability, from which new theories could be derived. As was seen in the previous chapter, a major problem of core theory was the emptiness of the core for many games of interest, while stable set theory remained unresolved for practical purposes, lacking a method of distinguishing among the several stable sets of a given game. In the theory of bargaining sets (Aumann & Maschler, 1964; Maschler, 1963b), an alternative explication of stability is provided, such that a proposed PC belongs to the solution set of the game if, in a bargaining sequence of “threats” to disrupt the PC by one player against another, each “threat” can be satisfactorily answered by a “counterthreat.” Before proceeding to the theory proper, this alternative explication of stability is discussed.
