Delay, multiplicity, and non-existence of equilibrium in unanimity bargaining games

V. Britz, P.J.J. Herings*, A. Predtetchinski

*Corresponding author for this work

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Abstract

We consider a class of perfect information bargaining games with unanimity acceptance rule. The proposer and the order of responding players are determined by the state that evolves stochastically over time. The probability distribution of the state in the next period is determined jointly by the current state and the identity of the player who rejected the current proposal. This protocol encompasses a vast number of special cases studied in the literature. We show that subgame perfect equilibria in pure stationary strategies need not exist. When such equilibria do exist, they may exhibit delay. Limit equilibria as the players become infinitely patient need not be unique.

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Original languageEnglish
Pages (from-to)192-202
Number of pages11
JournalJournal of Mathematical Economics
Volume61
DOIs
Publication statusPublished - Dec 2015

Keywords

  • Strategic bargaining
  • Subgame perfect equilibrium
  • Stationary strategies
  • Nash bargaining solution
  • PERFECT EQUILIBRIUM
  • MODEL
  • EXTERNALITIES
  • PROPOSERS

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