Non-cooperative support for the asymmetric Nash bargaining solution

Volker Britz; P.J.J. Herings; Arkadi Predtetchinski

doi:10.1016/j.jet.2010.04.003

Non-cooperative support for the asymmetric Nash bargaining solution

Volker Britz, P.J.J. Herings^*, Arkadi Predtetchinski

^*Corresponding author for this work

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Abstract

We study a model of non-cooperative multilateral unanimity bargaining on a full-dimensional payoff set. The probability distribution with which the proposing player is selected in each bargaining round follows an irreducible Markov process. If a proposal is rejected, negotiations break down with an exogenous probability and the next round starts with the complementary probability. As the risk of exogenous breakdown vanishes, stationary subgame perfect equilibrium payoffs converge to the weighted Nash bargaining solution with the stationary distribution of the Markov process as the weight vector. (C) 2010 Elsevier Inc. All rights reserved.

Original language	English
Pages (from-to)	1951-1967
Number of pages	17
Journal	Journal of Economic Theory
Volume	145
Issue number	5
DOIs	https://doi.org/10.1016/j.jet.2010.04.003
Publication status	Published - Sept 2010
Externally published	Yes

Keywords

Nash bargaining solution
Subgame perfect equilibrium
Stationary strategies
Markov process
MODEL
GAMES

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AB - We study a model of non-cooperative multilateral unanimity bargaining on a full-dimensional payoff set. The probability distribution with which the proposing player is selected in each bargaining round follows an irreducible Markov process. If a proposal is rejected, negotiations break down with an exogenous probability and the next round starts with the complementary probability. As the risk of exogenous breakdown vanishes, stationary subgame perfect equilibrium payoffs converge to the weighted Nash bargaining solution with the stationary distribution of the Markov process as the weight vector. (C) 2010 Elsevier Inc. All rights reserved.

KW - Nash bargaining solution

KW - Subgame perfect equilibrium

KW - Stationary strategies

KW - Markov process

KW - MODEL

KW - GAMES

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DO - 10.1016/j.jet.2010.04.003

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Non-cooperative support for the asymmetric Nash bargaining solution

Abstract

Keywords

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