Dynamic bargaining and stability with veto players

Vincent Anesi and John Duggan

Games and Economic Behavior, 2017, vol. 103, issue C, 30-40

Abstract: This note examines the structure of stationary bargaining equilibria in the finite framework of Anesi (2010). The main result establishes a tight connection between the set of equilibrium absorbing points and the von Neumann–Morgenstern solutions: assuming that players are patient, that the voting rule is oligarchical, and that there is at least one veto player with positive recognition probability, a set of alternatives corresponds to the absorbing points of an equilibrium if and only if it is a von Neumann–Morgenstern solution. We also apply our analysis of ergodic properties of equilibria to the persistent agenda setter environment of Diermeier and Fong (2012). We show that all equilibria are essentially pure, and we extend their characterization of absorbing sets to allow an arbitrary voting rule and by removing the restriction to pure strategy equilibria.

Keywords: Bargaining; Endogenous status quo; Markov perfect equilibrium; Von Neumann–Morgenstern solution (search for similar items in EconPapers)
JEL-codes: C78 D71 D72 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:103:y:2017:i:c:p:30-40

DOI: 10.1016/j.geb.2016.04.010

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