Multi-Agent Bilateral Bargaining and the Nash Bargaining Solution

Sang-Chul Suh and Quan Wen ()

No 306, Vanderbilt University Department of Economics Working Papers from Vanderbilt University Department of Economics

Abstract: This paper studies a bargaining model where n players play a sequence of (n-1) bilateral bargaining sessions. In each bilateral bargaining session, two players follow the same bargaining process as in Rubinstein's (1982). A partial agreement between two players is reached in the session and one player effectively leaves the game with a share agreed upon in the partial agreement and the other moves on to the next session. Such a (multi-agent) bilateral bargaining model admits a unique subgame perfect equilibrium. Depending on who exits and who stays, we consider two bargaining procedures. The equilibrium outcomes under the two bargaining procedures converge to the Nash (1950) bargaining solution of the corresponding bargaining problem as the players' discount factor goes to one. Thus, the bilateral bargaining model studied in this paper provides a non-cooperative foundation for the Nash cooperative bargaining solution in the multilateral case.

Keywords: Multilateral bargaining; subgame perfect equilibrium; Nash bargaining solution (search for similar items in EconPapers)
JEL-codes: C72 C78 (search for similar items in EconPapers)
Date: 2003-03
New Economics Papers: this item is included in nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://www.accessecon.com/pubs/VUECON/vu03-w06.pdf First version, 2003 (application/pdf)

Related works:
Journal Article: Multi-agent bilateral bargaining and the Nash bargaining solution (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:van:wpaper:0306

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