A Noncooperative Theory of Coalitional Bargaining

by: Kalyan Chatterjee, Bhaskar Dutta, Debraj Ray, Kunal Sengupta

The Review of Economic Studies, Vol. 60, No. 2. (1993), pp. 463-477.

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Abstract

We explore a sequential offers model of n-person coalitional bargaining with transferable utility and with time discounting. Our focus is on the efficiency properties of stationary equilibria of strictly superadditive games, when the discount factor d is sufficiently large; we do, however, consider examples of other games where subgame perfectness alone is employed. It is shown that delay and the formation of inefficient subcoalitions can occur in equilibrium, the latter for some or all orders of proposer. However, efficient stationary equilibrium payoffs converge to a point in the core, as d -> 1. Strict convexity is a sufficient condition for there to exist an efficient stationary equilibrium payoff vector for sufficiently high d. This vector converges as d -> 1 to the egalitarian allocation of Dutta and Ray (1989).

@article{citeulike:1277279, abstract = {We explore a sequential offers model of n-person coalitional bargaining with transferable utility and with time discounting. Our focus is on the efficiency properties of stationary equilibria of strictly superadditive games, when the discount factor d is sufficiently large; we do, however, consider examples of other games where subgame perfectness alone is employed. It is shown that delay and the formation of inefficient subcoalitions can occur in equilibrium, the latter for some or all orders of proposer. However, efficient stationary equilibrium payoffs converge to a point in the core, as d -\&\#62; 1. Strict convexity is a sufficient condition for there to exist an efficient stationary equilibrium payoff vector for sufficiently high d. This vector converges as d -\&\#62; 1 to the egalitarian allocation of Dutta and Ray (1989).}, author = {Chatterjee, Kalyan and Dutta, Bhaskar and Ray, Debraj and Sengupta, Kunal }, citeulike-article-id = {1277279}, doi = {10.2307/2298067}, journal = {The Review of Economic Studies}, number = {2}, pages = {463--477}, posted-at = {2008-07-08 10:30:34}, priority = {2}, title = {A Noncooperative Theory of Coalitional Bargaining}, url = {http://dx.doi.org/10.2307/2298067}, volume = {60}, year = {1993} }

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TY - JOUR ID - citeulike:1277279 L3 - citeulike-article-id:1277279 TI - A Noncooperative Theory of Coalitional Bargaining JF - The Review of Economic Studies VL - 60 IS - 2 SP - 463 EP - 477 N2 - We explore a sequential offers model of n-person coalitional bargaining with transferable utility and with time discounting. Our focus is on the efficiency properties of stationary equilibria of strictly superadditive games, when the discount factor d is sufficiently large; we do, however, consider examples of other games where subgame perfectness alone is employed. It is shown that delay and the formation of inefficient subcoalitions can occur in equilibrium, the latter for some or all orders of proposer. However, efficient stationary equilibrium payoffs converge to a point in the core, as d -> 1. Strict convexity is a sufficient condition for there to exist an efficient stationary equilibrium payoff vector for sufficiently high d. This vector converges as d -> 1 to the egalitarian allocation of Dutta and Ray (1989). AU - Chatterjee, Kalyan AU - Dutta, Bhaskar AU - Ray, Debraj AU - Sengupta, Kunal PY - 1993/// UR - http://dx.doi.org/10.2307/2298067 ER -

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