Mutually acceptable courses of action (Q1016329)

This paper offers a game-theoretic framework that enables the analysis of situations whereby rational individuals with different beliefs and views of the world agree to a shared course of action. It introduces a mutually acceptable course of action, which can be viewed as an contract or a social norm that free rational individuals would be willing to follow for their own diverse reasons. It is shown that by varying the degree of completeness of the underlying course of action, the concept can be related to commonly used solutions, such as perfect equilibrium, perfect Bayesian equilibrium, self-confirming equilibrium, and rationalizable outcomes.