Markov equilibria in a model of bargaining in networks

Dilip Abreu and Mihai Manea

Games and Economic Behavior, 2012, vol. 75, issue 1, 1-16

Abstract: We study the Markov perfect equilibria (MPEs) of an infinite horizon game in which pairs of players connected in a network are randomly matched to bargain. Players who reach agreement are removed from the network without replacement. We establish the existence of MPEs and show that MPE payoffs are not necessarily unique. A method for constructing pure strategy MPEs for high discount factors is developed. For some networks, we find that all MPEs are asymptotically inefficient as players become patient.

Keywords: Bargaining; Decentralized markets; Equilibrium existence; Inefficiency; Markov perfect equilibrium; Networks; Random matching (search for similar items in EconPapers)
JEL-codes: C7 D6 D85 L14 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Related works:
Working Paper: Markov Equilibria in a Model of Bargaining in Networks (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:75:y:2012:i:1:p:1-16

DOI: 10.1016/j.geb.2011.09.004

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