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The Burning Coalition Bargaining Model

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  • Marco Rogna

    (Free University of Bolzano‐Bozen, Faculty of Economics and Management, Italy)

Abstract

The paper presents a coalitional bargaining model with a peculiar type of partial breakdown: the Burning Coalition Bargaining Model. Rather than triggering the end of all negotiations or the exclusion of some players from the game, as already proposed in the literature, in this model the rejection of a proposal causes the possibility of the proposed coalition to vanish. Under this type of partial breakdown and adopting a standard rejecter-proposes protocol, 0-normalized, 3-players games are examined for extreme values of the breakdown probability. When such probability is equal to one, efficiency is more difficult to obtain than in models adopting discounting. Furthermore, when an efficient outcome is attained, the final pay-offs distribution reflects the strength of players in the game, with strength being defined by belonging to more valuable coalitions. The same feature is retained when considering a probability of breakdown approaching zero.

Suggested Citation

  • Marco Rogna, 2020. "The Burning Coalition Bargaining Model," BEMPS - Bozen Economics & Management Paper Series BEMPS69, Faculty of Economics and Management at the Free University of Bozen.
    • Handle: RePEc:bzn:wpaper:bemps69
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    References listed on IDEAS

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    Cited by:

    1. Roberto Serrano, 2021. "Sixty-seven years of the Nash program: time for retirement?," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 12(1), pages 35-48, March.

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    More about this item

    Keywords

    Bargaining Theory; Bargaining protocols; Coalition formation; Efficiency; Partial breakdown.;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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