A self enforcing agreement is:
A)one that only requires the courts to enforce.
B)one that only exists where the parties mutually agree to the deal.
C)one that only requires the presence of a notary public.
D)one that is a Nash equilibrium.

Question

Quizplus · Accepted Answer

A self enforcing agreement is one that is a Nash equilibrium, which means that no party has an incentive to deviate from the agreement, even if there is no third party to enforce the agreement. Therefore, option D is the correct choice.

A Self Enforcing Agreement Is