History has seen many examples of the lone man — like Christ, Luther, Gandhi, or Hitler — who without initial wealth or position, succeeds in changing the behavior of an entire society, for good or for ill. Whence comes this power. No doubt such leaders have possessed extraordinary ability, and have formulated original ideas with great appeal which others could readily follow. But there is another striking similarity among these leaders; namely their single-minded devotion to their, ideals, and their uncompromising attitude toward those who opposed them, no matter what the personal cost. There is hardly any need to document this facet of their personalities, so widely is it known. But we cannot help recalling Gandhi’s threat to starve himself to death if the fighting between Hindus and Muslims did not stop. Indeed the whole-hearted commitment of these leaders to their ideals was often reflected in their followers’ commitment to them. The purpose of this paper is to show how significant is the power to make commitments, perhaps in the name of some ideal.
JEL Classification: 026
Keywords: Commitment credible threat, Repeated games, Game theory
In this paper we propose a pseudo-Nash equilibrium for N-person games in which very simply we allow play in the last period to be arbitrary, but otherwise it must conform to the (perfect) Nash optimality criterion.
JEL Classification: 026
Keywords: Pseudo-Nash equilibrium, Arbitrary last period play, Overlapping generations economies, Radner’s definition, “Crazy equilibrium”