Bargaining with non-convexities

P.J.J. Herings; A. Predtetchinski

doi:10.1016/j.geb.2015.02.009

Bargaining with non-convexities

P.J.J. Herings^*, A. Predtetchinski

^*Corresponding author for this work

Microeconomics & Public Economics

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Abstract

We consider the canonical non-cooperative multilateral bargaining game with a set of feasible payoffs that is closed and comprehensive from below, contains the disagreement point in its interior, and is such that the individually rational payoffs are bounded. We show that a pure stationary subgame perfect equilibrium having the no-delay property exists, even when the space of feasible payoffs is not convex. 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 the non-convex case.

Data source: no data

Original language	English
Pages (from-to)	151-161
Number of pages	11
Journal	Games and Economic Behavior
Volume	90
DOIs	https://doi.org/10.1016/j.geb.2015.02.009
Publication status	Published - Mar 2015

Keywords

Bargaining
Non-convexities
Stationary subgame perfect equilibrium
Existence
Pure strategies
NONCONVEX PROBLEMS
STOCHASTIC-MODEL
EQUILIBRIUM
EXTENSION
EQUATIONS
GAMES

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10.1016/j.geb.2015.02.009

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Cite this

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title = "Bargaining with non-convexities",

abstract = "We consider the canonical non-cooperative multilateral bargaining game with a set of feasible payoffs that is closed and comprehensive from below, contains the disagreement point in its interior, and is such that the individually rational payoffs are bounded. We show that a pure stationary subgame perfect equilibrium having the no-delay property exists, even when the space of feasible payoffs is not convex. 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 the non-convex case.Data source: no data",

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author = "P.J.J. Herings and A. Predtetchinski",

year = "2015",

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language = "English",

volume = "90",

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T1 - Bargaining with non-convexities

AU - Herings, P.J.J.

AU - Predtetchinski, A.

PY - 2015/3

Y1 - 2015/3

N2 - We consider the canonical non-cooperative multilateral bargaining game with a set of feasible payoffs that is closed and comprehensive from below, contains the disagreement point in its interior, and is such that the individually rational payoffs are bounded. We show that a pure stationary subgame perfect equilibrium having the no-delay property exists, even when the space of feasible payoffs is not convex. 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 the non-convex case.Data source: no data

AB - We consider the canonical non-cooperative multilateral bargaining game with a set of feasible payoffs that is closed and comprehensive from below, contains the disagreement point in its interior, and is such that the individually rational payoffs are bounded. We show that a pure stationary subgame perfect equilibrium having the no-delay property exists, even when the space of feasible payoffs is not convex. 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 the non-convex case.Data source: no data

KW - Bargaining

KW - Non-convexities

KW - Stationary subgame perfect equilibrium

KW - Existence

KW - Pure strategies

KW - NONCONVEX PROBLEMS

KW - STOCHASTIC-MODEL

KW - EQUILIBRIUM

KW - EXTENSION

KW - EQUATIONS

KW - GAMES

U2 - 10.1016/j.geb.2015.02.009

DO - 10.1016/j.geb.2015.02.009

M3 - Article

SN - 0899-8256

VL - 90

SP - 151

EP - 161

JO - Games and Economic Behavior

JF - Games and Economic Behavior

ER -