Reject and renegotiate: The Shapley value in multilateral bargaining

Yuan Ju

Journal of Mathematical Economics, 2012, vol. 48, issue 6, 431-436

Abstract: This paper investigates three distinctive and intuitive renegotiation bargaining protocols that all yield the Shapley value as the unique subgame perfect equilibrium outcome. These protocols, built on the multi-bidding procedure of Pérez-Castrillo and Wettstein (2001), allow more freedom in multilateral bargaining where rejected players can further negotiate and form coalitions. The self-duality of the Shapley value plays a key role in the second and third results. Moreover, these renegotiation protocols allow an actual play along the equilibrium path to restore the Shapley value in case of a ‘mistake’ made before.

Keywords: Bargaining; Subgame perfect equilibrium; Shapley value; Renegotiation (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:48:y:2012:i:6:p:431-436

DOI: 10.1016/j.jmateco.2012.08.009

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