UNIQUENESS IN RANDOM-PROPOSER MULTILATERAL BARGAINING

We study the one-seller/two-buyer bargaining problem with negative identity-dependent externalities with an alternating offer bargaining model in which new owners of the object have the opportunity of resale. We identify the generically unique subgame perfect equilibrium outcome. The resale opportunity increases the competition among the buyers and therefore benefits the seller. When competition between buyers is very fierce, the seller may prefer to respond to bids rather than to propose an offer herself: a first-mover disadvantage.

A bid-offer–counteroffer mechanism is proposed to solve a fundamental two-person decision choice problem with two alternatives. It yields a unique subgame perfect equilibrium outcome, and leads to an intuitive overall solution that offers a reconciliation between egalitarianism and utilitarianism. We then investigate the axiomatic foundation of the solution. Furthermore, we compare it with several conventional strategic approaches to this setting.

On the Asymptotic Uniqueness of Bargaining Equilibria

This paper studies a multi-stage decentralized matching model where firms sequentially propose their (unique) positions to workers. At each stage workers sequentially decide which offer to accept (if any). A firm whose offer has been declined may make an offer to another worker in the next stage. The game stops when all firms either have been matched to a worker or have already made unsuccessful offers to any worker remaining in the market. We show that there is a unique subgame-perfect equilibrium outcome, the worker-optimal matching. Firms in this game have a weakly dominant strategy, which consists of making offers in the same order as given by their preferences. When workers play simultaneously any stable matching can be obtained as an equilibrium outcome, but an unstable matching can obtain in equilibrium.

A non--<:ooperative model of coalition bargaining in the context of characteristic functions with side-payments is introduced. Temporary commitments to payoff demands are a salient feature of the model. For every coalition game, the model generates a finite extensive game with perfect information. For two basic cases - unanimity games and 3-person quota games without the grand coalition - the non--<:ooperative analysis yields results akin to cooperative game theory. The analysis is based on subgame perfectness alone without the use of further selection criteria. The equal payoff division is the only subgame perfect equilibrium outcome in the case of the zero-normalized unanimity game. In the case of the 3-person quota game without the grand coalition, the players receive their quotas in 2-person coalitions, if a subgame perfect equilibrium is played; each of the three 2-person coalitions occurs with probability 1/3.

Games where players' payoffs are given by intervals, instead of scalars, provide a conceptually attractive framework to account for uncertainty and vagueness in decision-making processes. In a cooperative game, one needs to determine the characteristic function values for all possible coalitions. In this paper, we extend the classical $ \alpha $ and $ \beta $ characteristic functions (CFs), initially defined for scalar payoffs, to cooperative interval games. Both characteristic functions are based on a solution of zero-sum interval games with the coalition being the maximizer player and the anti-coalition the minimizer player. We propose an algorithm to define the interval values of a cooperative game in the form of $ \alpha $ and $ \beta $ CFs and illustrate its use on an example with three players. Further, we discuss some properties of cooperative interval games and calculate an interval Shapley value. As expected, different characteristic functions lead to different Shapley values.

Stochastic bargaining in the lab

Two players, A and B, bargain to divide a perfectly divisible pie. In a bargaining model with constant discount factors, $$\delta _A$$ and $$\delta _B$$ , we extend Rubinstein (Econometrica 50:97–110, 1982)’s alternating offers procedure to more general deterministic procedures, so that any player in any period can be the proposer. We show that each bargaining game with a deterministic procedure has a unique subgame perfect equilibrium (SPE) payoff outcome, which is efficient. Conversely, each efficient division of the pie can be supported as an SPE outcome by some procedure if $$\delta _A+\delta _B\ge 1$$ , while almost no division can ever be supported in SPE if $$\delta _A+\delta _B < 1$$ .

PurposeThis paper deals with cooperative games whose characteristic functions are fuzzy intervals, i.e. the worth of a coalition is not a real number but a fuzzy interval. This means that one observes a lower and an upper bound of the considered coalitions. This is very important, for example, from a computational and algorithmic viewpoint. The authors notice that the approach is general, since the characteristic function fuzzy interval values may result from solving general optimization problems.Design/methodology/approachThis paper deals with cooperative games whose characteristic functions are fuzzy intervals, i.e. the worth of a coalition is not a real number but a fuzzy interval. A situation in which a finite set of players can obtain certain fuzzy payoffs by cooperation can be described by a cooperative fuzzy interval game.FindingsIn this paper, the authors extend a class of solutions for cooperative games that all have some egalitarian flavour in the sense that they assign to every player some initial payoff and distribute the remainder of the worth v(N) of the grand coalition N equally among all players under fuzzy uncertainty.Originality/valueIn this paper, the authors extend a class of solutions for cooperative games that all have some egalitarian flavour in the sense that they assign to every player some initial payoff and distribute the remainder of the worth v(N) of the grand coalition N equally among all players under fuzzy uncertainty. Examples of such solutions are the centre-of-gravity of the imputation-set value, shortly denoted by CIS value, egalitarian non-separable contribution value, shortly denoted by ENSC value and the equal division solution. Further, the authors discuss a class of equal surplus sharing solutions consisting of all convex combinations of the CIS value, the ENSC value and the equal division solution. The authors provide several characterizations of this class of solutions on variable and fixed player set. Specifications of several properties characterize specific solutions in this class.

Dynamic negotiation with time-varying Pareto frontier

In this paper, we build and investigate cooperative games with different characteristic functions (von Neumann–Morgenstern, Petrosyan–Zaccour, Gromova–Petrosyan) on the base of symmetrical Cournot oligopoly game-theoretic models in normal form. We find Nash and Stackelberg equilibria and cooperative solutions for nonsymmetrical Cournot oligopoly game-theoretic models in normal form. Also, we build and investigate cooperative three-player games with the same characteristic functions on the base of these models, including the calculation of Shapley value. We compare payoffs received by the players according to different optimality principles of cooperative games and games in normal form.

The alternating offers game due to Rubinstein (1982) had been used by Binmore (1980) and by Binmore et.al. (1986) to provide via its unique subgame perfect equilibrium an approximate non-cooperative support for the Nash bargaining solution of associated cooperative two-person bargaining games. These results had strengthened the prominent role of the Nash bargaining solution in cooperative axiomatic bargaining theory and its application, for instance in labor markets, and have often even be interpreted as a mechanism theoretical implementation of the Nash solution. Our results in the present paper provide exact non-cooperative foundations first, in our Proposition, via weakly subgame perfect equilibria of a game that is a modification of Rubinstein´s game, then in our Theorem, via sub-game perfect equilibria of a game that is a further modification of our first game. Moreover, they provide a general rule how to transform approximate support results into exact ones. Finally, we discuss the relation of the above mentioned support results, including our present ones, with mechanism theoretic implementation in (weakly) subgame perfect equilibrium of the Nash solution. There we come to the conclusion that a sound interpretation as an implementation can hardly be found except in very rare cases of extremely restricted domains of players´ preferences.

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 δ 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 δ → 1. Strict convexity is a sufficient condition for there to exist an efficient stationary equilibrium payoff vector for sufficiently high δ. This vector converges as δ → 1 to the egalitarian allocation of Dutta and Ray (1989).

In this paper we present cooperative games and its fuzzification. A cooperative game (or coalitional game is usually described by a set of players and a characteristics function. In a transferable utility games only one number is attached to each coalition. Cooperative games are useful in considering profit allocation among multiple decision makes who cooperate with each other.

Legislative Bargaining and Coalition Formation