The Coalitional Nash Bargaining Solution

Olivier Compte and Philippe Jehiel ()
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Olivier Compte: PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: The coalitional Nash bargaining solution is defined to be the core allocation for which the product of players' payoffs is maximal. We consider a non-cooperative model with discounting in which one team may form and every player is randomly selected to make a proposal in every period. The grand team, consisting of all players, generates the largest surplus. But a smaller team may form. We show that as players get more patient if an efficient and stationary equilibrium exists, it must deliver payoffs that correspond to the coalitional Nash bargaining solution. We also characterize when an efficient and stationary equilibrium exists, which requires conditions that go beyond the nonemptiness of the core.

Keywords: Bargaining; Coalitions; Credible coalitions; Efficiency (search for similar items in EconPapers)
Date: 2010-09
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Citations: View citations in EconPapers (44)

Published in Econometrica, 2010, 78 (5), pp.1593-1623. ⟨10.3982/ECTA7883⟩

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Related works:
Journal Article: The Coalitional Nash Bargaining Solution (2010)
Working Paper: The Coalitional Nash Bargaining Solution (2010)
Working Paper: The Coalitional Nash Bargaining Solution (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:halshs-00754423

DOI: 10.3982/ECTA7883

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