SFB 303 Discussion Paper No. A - 076

Author: Schweizer, Urs
Title: Litigation and Settlement II: Stability and Other Criteria
Abstract: The game of litigation and settlement introduced by Schweizer (1986) is taken as an example to explore the cutting power of stability and other tests. Stability and universal divinity which, in the present game, coincides with the test based on "never a weak best response" lead to some essentially unique outcome. The test based on dominance and the intuitive criterion, however, are shown to rule out none of the sequential equilibrium outcomes. Divinity, finally, has some cutting power but still allows a substantial variety of outcomes to pass.
Creation-Date: September 1986
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