noncooperative

Noncooperative is an adjective used to describe contexts in which individuals or groups interact without binding agreements or enforceable contracts among them. In economics and game theory, a noncooperative game is a strategic interaction in which each participant chooses a course of action to maximize personal payoff, taking into account the potential choices of others, with no guarantee that agreements will be honored.

In contrast to cooperative game theory, which analyzes outcomes that can be achieved through coalitions and binding contracts, noncooperative game theory treats agreements as nonbinding unless voluntarily upheld. The framework emphasizes strategic independence, where each player's optimal action depends on the anticipated actions of others. The field originated with the work of von Neumann and Morgenstern and was later formalized by John Nash, who introduced the concept of equilibrium where no player can improve by unilaterally changing strategy.

Key concepts include Nash equilibrium, dominant strategies, mixed strategies, and repeated or dynamic games leading to subgame perfect equilibria. Many noncooperative analyses use backward induction in games of perfect information and formal tools for incomplete information, such as Bayesian games.

Applications and examples include the prisoners' dilemma, Cournot and Bertrand competition in oligopolies, auction formats, and bargaining scenarios with no enforceable agreements. Noncooperative models also appear in international politics and social behavior, where states or individuals act in self-interest without enforceable agreements.

Limitations include reliance on rationality and full or common knowledge assumptions, which may not hold in practice. Critics note that noncooperative models can mispredict outcomes when cooperation, trust, or reputation significantly shape behavior. Extensions address bounded rationality, incomplete information, and dynamic incentives.