A Noncooperative Theory of Coalitional Bargaining

Kalyan Chatterjee, Bhaskar Dutia, Debraj Ray and Kunal Sengupta ()
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Kalyan Chatterjee: Pennsylvania State University, USA
Bhaskar Dutia: Indian Statistical Institute, India

Chapter 5 in Bargaining in the Shadow of the Market:Selected Papers on Bilateral and Multilateral Bargaining, 2013, pp 97-111 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractWe explore a sequential offers model of n-person coalitional bargaining with transferable utility and with time discounting. Our focus is on the efficiency properties of stationary equilibria of strictly superadditive games, when the discount factor δ is sufficiently large; we do, however, consider examples of other games where subgame perfectness alone is employed.It is shown that delay and the formation of inefficient subcoalitions can occur in equilibrium, the latter for some or all orders of proposer. However, efficient stationary equilibrium payoffs converge to a point in the core, as δ → 1. Strict convexity is a sufficient condition for there to exist an efficient stationary equilibrium payoff vector for sufficiently high δ. This vector converges as δ → 1 to the egalitarian allocation of Dutta and Ray (1989).

Keywords: Bilateral Bargaining; Noncooperative Theory of Coalitional Bargaining; Political Negotiations; Multilateral Bargaining; Coalitional Bargaining; Arbitration; Dynamic Model of Negotiation (search for similar items in EconPapers)
Date: 2013
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Journal Article: A Noncooperative Theory of Coalitional Bargaining (1993)
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