Nash demand game and the Kalai-Smorodinsky solution

Nejat Anbarci () and John Boyd ()

Games and Economic Behavior, 2011, vol. 71, issue 1, 14-22

Abstract: We introduce two new variations on the Nash demand game. In one, as in all past variants of Nash demand games, the Nash bargaining solution is the equilibrium outcome. The other demand game allows for probabilistic continuation in cases of infeasible joint demands. Specifically, with probability (1-p) the game terminates and the players receive their disagreement payoffs; but with probability p the game continues to a second stage in which one of the two incompatible demands is randomly selected and implemented. Surprisingly, the Kalai-Smorodinsky solution is always the outcome of the most robust equilibrium of this game. Moreover, ranking other solution concepts is impossible.

Keywords: Bargaining; Nash; demand; game; Nash; solution; Exogenous; breakdown; probability; Kalai-Smorodinsky; solution (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Working Paper: Nash demand game and the Kalai-Smorodinsky solution (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:71:y:2011:i:1:p:14-22

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