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Implementing egalitarianism in a class of Nash demand games

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Listed:
  • Emin Karagözoğlu

    (Bilkent University
    CESifo)

  • Shiran Rachmilevitch

    (University of Haifa)

Abstract

We add a stage to Nash’s demand game by allowing the greedier player to revise his demand if the demands are not jointly feasible. If he decides to stick to his initial demand, then the game ends and no one receives anything. If he decides to revise it down to $$1-x$$ 1 - x , where x is his initial demand, the revised demand is implemented with certainty. The implementation probability changes linearly between these two extreme cases. We derive a condition on the feasible set under which the two-stage game has a unique subgame perfect equilibrium. In this equilibrium, there is first-stage agreement on the egalitarian demands. We also study two n-player versions of the game. In either version, if the underlying bargaining problem is “divide-the-dollar,” then equal division is sustainable in a subgame perfect equilibrium if and only if the number of players is at most four.

Suggested Citation

  • Emin Karagözoğlu & Shiran Rachmilevitch, 2018. "Implementing egalitarianism in a class of Nash demand games," Theory and Decision, Springer, vol. 85(3), pages 495-508, October.
    • Handle: RePEc:kap:theord:v:85:y:2018:i:3:d:10.1007_s11238-018-9656-x
    DOI: 10.1007/s11238-018-9656-x
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    References listed on IDEAS

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    1. Anbarci, Nejat & Boyd III, John H., 2011. "Nash demand game and the Kalai-Smorodinsky solution," Games and Economic Behavior, Elsevier, vol. 71(1), pages 14-22, January.
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    4. Ashlagi, Itai & Karagözoğlu, Emin & Klaus, Bettina, 2012. "A non-cooperative support for equal division in estate division problems," Mathematical Social Sciences, Elsevier, vol. 63(3), pages 228-233.
    5. Rubinstein, Ariel & Safra, Zvi & Thomson, William, 1992. "On the Interpretation of the Nash Bargaining Solution and Its Extension to Non-expected Utility Preferences," Econometrica, Econometric Society, vol. 60(5), pages 1171-1186, September.
    6. Shiran Rachmilevitch, 2017. "Punishing greediness in divide-the-dollar games," Theory and Decision, Springer, vol. 82(3), pages 341-351, March.
    7. Esat Cetemen & Emin Karagözoğlu, 2014. "Implementing equal division with an ultimatum threat," Theory and Decision, Springer, vol. 77(2), pages 223-236, August.
    8. Carlsson, Hans, 1991. "A Bargaining Model Where Parties Make Errors," Econometrica, Econometric Society, vol. 59(5), pages 1487-1496, September.
    9. Dilip Abreu & David Pearce, 2015. "A Dynamic Reinterpretation of Nash Bargaining With Endogenous Threats," Econometrica, Econometric Society, vol. 83(4), pages 1641-1655, July.
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    Cited by:

    1. Rachmilevitch, Shiran, 2020. "An implementation of the Nash bargaining solution by iterated strict dominance," Economics Letters, Elsevier, vol. 188(C).
    2. Emin Karagözoğlu & Kerim Keskin & Çağrı Sağlam, 2023. "(In)efficiency and equitability of equilibrium outcomes in a family of bargaining games," International Journal of Game Theory, Springer;Game Theory Society, vol. 52(1), pages 175-193, March.
    3. William Thomson, 2022. "On the axiomatic theory of bargaining: a survey of recent results," Review of Economic Design, Springer;Society for Economic Design, vol. 26(4), pages 491-542, December.
    4. Shiran Rachmilevitch, 2022. "Reasonable Nash demand games," Theory and Decision, Springer, vol. 93(2), pages 319-330, September.
    5. Shiran Rachmilevitch, 2019. "Egalitarianism, utilitarianism, and the Nash bargaining solution," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 52(4), pages 741-751, April.
    6. Shiran Rachmilevitch, 2020. "Rewarding moderate behavior in a dynamic Nash Demand Game," International Journal of Game Theory, Springer;Game Theory Society, vol. 49(2), pages 639-650, June.

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