Malice in the Rubinstein bargaining game

Abstract

This is the first paper to incorporate malice into the Rubinstein alternating offers bargaining game. Initially, I examine outcomes with one-sided malice, allowing one of the bargaining players to be malicious in the sense that he obtains a positive payoff in every period in which the other player does not obtain any piece of the pie. This "malice payoff" is independent of whether the malicious player himself obtains the pie or not. I identify a unique SPNE of the bargaining game, and find that malice confers bargaining advantage; if the respondent is malicious, this can in some cases completely erode and even reverse first mover advantage. I then examine twosided malice. I find that the proposer's share when both players are malicious may either increase or decrease relative to the traditional Rubinstein shares. Even with two-sided malice, the proposer may end up with a lower share than the respondent. The results remain qualitatively similar under an alternative "continuous" formulation of malice. I contrast them with the case of envious preferences.

Decision and coordination of a low-carbon supply chain considering environmental tax policy on consumers

“…Therefore, the optimal solution of Nash bargaining under the cooperative game is difficult to achieve. This paper adopts Rubinstein bargaining game (Kerachian et al, 2010;Guha, 2018) to simulate the process and accomplish profit distribution. The distribution ratios of increased profits because of cooperative games are d m and d r (d m þ d r = 1 ), respectively.…”

Arbitration, Indivisible Assets and the Possibility of Malice

“…However, the first case makes an envious claimant feel envy, which is experienced as a cost. In Guha (), I explore the problem of Rubinstein bargaining over a (divisible) pie in the presence of malice, and contrast the results with those for envy. There is a substantial difference because envy got triggered discontinuously when the rival's share exceeded half, whereas malice utility was not subject to any discontinuities and was simply incurred in every period when the rival did not obtain a share.…”