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Abstract

In this article we combine Debreu’s (1952) social system with Hurwicz’s (1994,

2008) ideas of embedding a “desired” game form into a “natural” game form that includes

all feasible behavior, even if it is “illegal” according to the desired form. For the resulting

socio-legal system we extend Debreu’s concepts of a social system and its social equilibria to

a socio-legal system with its Debreu-Hurwicz equilibria.We build on a more general version

of social equilibrium due to Shafer and Sonnenschein (1975) that also generalizes the dc-mechanism

of Koray and Yildiz (2018) which relates implementation via mechanisms with

implementation via rights structures as introduced by Sertel (2001). In the second part we

apply and illustrate these new concepts via an application in the narrow welfarist framework

of two person cooperative bargaining. There we provide in a socio-legal system based on

Nash’s demand game an implementation of the Nash bargaining solution in Debreu-Hurwicz

equilibrium.