Formal mechanism ensures Pareto optimal contributions in dilemma games, indicating effective cooperation without enforcement.
I study a formal mechanism that can sustain Pareto optimality in a new and very broad class of dilemma games. In the absence of a central authority that could enforce multilateral agreements, the mechanism is based on binding unilateral commitments, which condition a player's (possibly multidimensional) contribution on other players' contributions. I show that unexploitable better response dynamics converge to Pareto optimal contributions when the game is played recurrently.
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Jörg Oechssler (2026) studied this question.
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