A self-enforcing agreement is an agreement that is enforced only by the parties to it; no external party can enforce or interfere with the agreement. (In this respect it differs from an enforceable

contract A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more parties. A contract typically involves consent to transfer of goods, services, money, or promise to transfer any of thos ...

.) The agreement will stand so long as the parties believe it is mutually beneficial and it is not breached by any party.''A Theory of Self-Enforcing Agreements'' L.G. Tesler, University of Chicago
/ref> In

game theory Game theory is the study of mathematical models of strategic interactions. It has applications in many fields of social science, and is used extensively in economics, logic, systems science and computer science. Initially, game theory addressed ...

, games in which cooperative behaviour can only be enforced through self-enforcing agreements are called non-cooperative games, whereas games allowing strategies relying on external enforcement are called cooperative games.

Nash equilibrium In game theory, the Nash equilibrium is the most commonly used solution concept for non-cooperative games. A Nash equilibrium is a situation where no player could gain by changing their own strategy (holding all other players' strategies fixed) ...

is the most common kind of self-enforcing agreement.

References

Agreements Game theory equilibrium concepts {{business-term-stub