A Noncooperative Foundation of the Neutral Bargaining Solution

Jin Yeub Kim
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Jin Yeub Kim: Yonsei Univ

No 2020rwp-175, Working papers from Yonsei University, Yonsei Economics Research Institute

Abstract: This paper studies Myerson's neutral bargaining solution for a class of Bayesian bargaining problems in which the solution is unique. For this class of examples, I consider a noncooperative mechanism-selection game. I find that all of the interim incentive efficient mechanisms can be supported as sequential equilibria. Further, standard refinement concepts and selection criteria do not restrict the large set of interim Pareto-undominated sequential equilibria. I provide a noncooperative foundation of the neutral bargaining solution by characterizing the solution as a unique coherent equilibrium allocation.

Keywords: Neutral bargaining solution; mechanism-selection game; equilibrium refinement; equilibrium selection criterion; credibility; coherent plan (search for similar items in EconPapers)
JEL-codes: C71 C72 C78 D82 (search for similar items in EconPapers)
Pages: 28pages
Date: 2020-06
New Economics Papers: this item is included in nep-gth, nep-mic and nep-ore
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