A Stochastic Model of Sequential Bargaining with Complete Information

Merlo, Antonio; Wilson, Charles Morrow

doi:10.2307/2951630

Cited by 266 publications

(225 citation statements)

References 19 publications

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“…First, unlike the bilateral bargaining game studied by Rubinstein [33], multilateral bargaining games entail a plethora of SPE (see, e.g., [2,3,17,36]). However, the stationarity restriction often dramatically reduces the equilibrium set and hence is widely used in the literature (see, e.g., [2,3,8,10,11,15,22,23]). Second, an SSPE may entail the least "complexity" in certain bargaining games similar to the one analyzed here [4] and therefore serve as a natural focal point.…”

Section: The Modelmentioning

confidence: 99%

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Proposal power and majority rule in multilateral bargaining with costly recognition

Yıldırım

2007

Journal of Economic Theory

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This paper studies a sequential bargaining model in which agents expend efforts to be the proposer. In equilibrium, agents' effort choices are influenced by the prize and cost effects. The (endogenous) prize is the difference between the residual surplus an agent obtains when he is the proposer and the payment he expects to receive when he is not. Main results include: (1) under the unanimity voting rule, two agents with equal marginal costs propose with equal probabilities, regardless of their time preferences; (2) under a nonunanimity rule, however, the more patient agent proposes with a greater probability; (3) while, under the unanimity rule, the social cost decreases in group heterogeneity, it can increase under a nonunanimity rule; and (4) when agents are identical, the unanimity rule is socially optimal.

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Section: The Modelmentioning

confidence: 99%

“…21 To save on notation, I sometimes omit arguments of functions whenever there is no confusion. 22 Given…”

Section: K-majority Rulementioning

confidence: 99%

Proposal power and majority rule in multilateral bargaining with costly recognition

Yıldırım

2007

Journal of Economic Theory

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“…While Pareto efficient policy sequences that allocate the entire pie to the same player in every period can be supported by an SPE, irrespective of players' patience, dynamic equilibria even fail the weaker criterion of ex post Pareto efficiency (e.g. Merlo and Wilson (1995)) which only requires one of the realizations of the equilibrium policy sequence to be Pareto efficient.…”

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confidence: 99%

“…Uniqueness of SMPE payoffs then follows from the following observation. The uniqueness results of Merlo and Wilson (1995) and Eraslan (2002) could be applied to our setting under additional restrictions on the utility functions; but Observation 2 only relies on concavity and differentiability.…”

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confidence: 99%

Bargaining in Standing Committees with an Endogenous Default: Figure 1

Anesi

Seidmann

2015

Review of Economic Studies

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Committee voting has mostly been investigated from the perspective of the standard Baron-Ferejohn model of bargaining over the division of a pie, in which bargaining ends as soon as the committee reaches an agreement. In standing committees, however, existing agreements can be amended. This paper studies an extension of the Baron-Ferejohn framework to a model with an evolving default that reflects this important feature of policymaking in standing committees: In each of an infinite number of periods, the ongoing default can be amended to a new policy (which is, in turn, the default for the next period). The model provides a number of quite different predictions. (i) From a positive perspective, the key distinction turns on whether the quota is less than unanimity. In that case, patient enough players waste substantial shares of the pie each period and the size principle fails in some pure strategy Markov perfect equilibria. By contrast, the unique Markov perfect equilibrium payoffs in a unanimity committee coincide with those in the corresponding Baron-Ferejohn framework. (ii) If players have heterogeneous discount factors then a large class of subgame perfect equilibria (including all Markov perfect equilibria) are inefficient.JEL classification: C73, C78, D71, D72.

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“…The existence of such an equilibrium has been shown in Banks and Duggan (2000). Merlo and Wilson (1995) consider the n-person cake division problem and obtain the existence of a unique subgame perfect equilibrium in stationary strategies when the set of feasible payoffs is convex and the proposer selection protocol is deterministic.…”

Section: Introductionmentioning

confidence: 99%

Bargaining with non-convexities

Herings

Predtetchinski

2015

Games and Economic Behavior

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We show that in the canonical non-cooperative multilateral bargaining game, a subgame perfect equilibrium exists in pure stationary strategies, even when the space of feasible payoffs is not convex. At such an equilibrium there is no delay. We also have the converse result that randomization will not be used in this environment in the sense that all stationary subgame perfect equilibria do not involve randomization on the equilibrium path. Nevertheless, mixed strategy profiles can lead to Pareto superior payoffs in non-convex cases.

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A Stochastic Model of Sequential Bargaining with Complete Information

Cited by 266 publications

References 19 publications

Proposal power and majority rule in multilateral bargaining with costly recognition

Proposal power and majority rule in multilateral bargaining with costly recognition

Bargaining in Standing Committees with an Endogenous Default: Figure 1

Bargaining with non-convexities

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