The effects of third-party transfers in sequential anchored bargaining

Suchan Chae () and Seho Kim ()
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Suchan Chae: Korea Advanced Institute of Science and Technology
Seho Kim: University of Maryland

International Journal of Game Theory, 2019, vol. 48, issue 1, No 6, 143-155

Abstract: Abstract We analyze a bargaining game where an anchor player bargains sequentially with n non-anchor players over the division of a pie in the presence of third-party transfers and show that there exists a unique perfect equilibrium. A lump-sum transfer is jointly shared by all players, while a transfer proportional to a player’s share affects only the party that has to make that transfer. When lump-sum transfers are zero, the anchor player and each non-anchor player bargain as if there is no further bargaining. It turns out that the anchor player and the last non-anchor player are in the most disadvantageous position with our bargaining protocol.

Keywords: Sequential bargaining; Anchored bargaining; Tax incidence (search for similar items in EconPapers)
JEL-codes: C22 C72 C78 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s00182-018-00657-x

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