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Coalitional Bargaining in Networks

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  • Thành Nguyen

    (Krannert School of Management, Purdue University, West Lafayette, Indiana 47907)

Abstract

We analyze a noncooperative bargaining game with a general coalition structure. In each period an opportunity for a feasible coalition to form arises according to a stochastic process, and a randomly selected agent in the coalition makes a take-it-or-leave-it offer to the other agents in the coalition. We develop a new technique based on convex programming to characterize the unique stationary equilibrium payoff of the game. We apply the framework to various settings including trading networks with middlemen and cooperation networks with overlapping communities. In these applications, feasible coalitions are determined by an underlying network structure. We study the effect of the underlying network on the pattern of trade and show how an agent’s payoff is related to her position in the network.

Suggested Citation

  • Thành Nguyen, 2015. "Coalitional Bargaining in Networks," Operations Research, INFORMS, vol. 63(3), pages 501-511, June.
    • Handle: RePEc:inm:oropre:v:63:y:2015:i:3:p:501-511
    DOI: 10.1287/opre.2015.1368
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    References listed on IDEAS

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    Cited by:

    1. Kostas Bimpikis & Shayan Ehsani & Rahmi İlkılıç, 2019. "Cournot Competition in Networked Markets," Management Science, INFORMS, vol. 67(6), pages 2467-2481, June.
    2. Elliott, M. & Talamàs, E., 2020. "Bargaining Foundations for Price Taking in Matching Markets," Cambridge Working Papers in Economics 2070, Faculty of Economics, University of Cambridge.
    3. Talamàs, Eduard, 2019. "Price dispersion in stationary networked markets," Games and Economic Behavior, Elsevier, vol. 115(C), pages 247-264.
    4. Thành Nguyen & Vijay Subramanian & Randall Berry, 2016. "Delay in Trade Networks," Operations Research, INFORMS, vol. 64(3), pages 646-661, June.
    5. Thành Nguyen, 2017. "Technical Note—Local Bargaining and Supply Chain Instability," Operations Research, INFORMS, vol. 65(6), pages 1535-1545, December.
    6. Thành Nguyen & Karthik Kannan, 2021. "Welfare Implications in Intermediary Networks," Information Systems Research, INFORMS, vol. 32(2), pages 378-393, June.

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