Bargaining Foundation for Ratio Equilibrium in Public Good Economies

Anne van den Nouweland () and Agnieszka Rusinowska
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Anne van den Nouweland: University of Oregon - Department of Economics, https://pages.uoregon.edu/annev/

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: We provide a bargaining foundation for the concept of ratio equilibrium in public good economies. We define a bargaining game of alternating offers in which players bargain to determine their cost shares of public good production and a level of public good. We study the stationary subgame perfect equilibrium without delay of the bargaining game. We demonstrate that when the players are perfectly patient, they are indifferent between the equilibrium offers of all players. We also show that every stationary subgame perfect equilibrium without delay in which the ratios offered by all players are the same leads to a ratio equilibrium. In addition, we demonstrate that all equilibrium ratios are offered by the players at some stationary subgame perfect equilibrium without delay. We use these results to discuss the case when the assumption of perfectly patient players is relaxed and the cost of delay vanishes

Keywords: ratio equilibrium; public good economy; bargaining game; stationary subgame perfect equilibrium (search for similar items in EconPapers)
JEL-codes: D7 H41 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2018-02
New Economics Papers: this item is included in nep-gth and nep-mic
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ftp://mse.univ-paris1.fr/pub/mse/CES2018/18004.pdf (application/pdf)

Related works:
Journal Article: Bargaining foundation for ratio equilibrium in public‐good economies (2020)
Working Paper: Bargaining foundation for ratio equilibrium in public good economies (2020)
Working Paper: Bargaining foundation for ratio equilibrium in public good economies (2020)
Working Paper: Bargaining foundation for ratio equilibrium in public good economies (2020)
Working Paper: Bargaining Foundation for Ratio Equilibrium in Public Good Economies (2018)
Working Paper: Bargaining Foundation for Ratio Equilibrium in Public Good Economies (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:mse:cesdoc:18004

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