 Coalitional bargaining with consistent counterfactualsRoberto Burguet and Ramon Caminal Journal of Economic Theory, 2020, vol. 187, issue C Abstract: We propose a new solution concept for TU cooperative games in characteristic function form, the SCOOP, which builds on the symmetric Nash Bargaining Solution (NBS) by adding a consistency requirement for negotiations inside every coalition. The SCOOP specifies the probability of success and the payoffs to each coalition. The players share the surplus of a coalition according to the NBS. The disagreement payoffs are computed as the expectation of payoffs in other coalitions, using a common probability distribution that is derived from the prior distribution. The predicted outcome can be probabilistic or deterministic, but only an efficient coalition can succeed with probability one. We discuss the necessary and sufficient conditions for an efficient solution. In either case, the SCOOP always exists, is generically unique for superadditive games, and is easy to compute. Moreover, in the spirit of the Nash program, we propose a non-cooperative protocol whose stationary equilibrium identifies the SCOOP as the limit equilibrium outcome. Keywords: Cooperative games; Coalitional bargaining; Endogenous disagreement payoffs; Consistent beliefs (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:187:y:2020:i:c:s0022053120300181 DOI: 10.1016/j.jet.2020.105013 Access Statistics for this article Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell More articles in Journal of Economic Theory from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.