IDEAS home Printed from https://ideas.repec.org/a/spr/empeco/v47y2014i2p669-693.html
   My bibliography  Save this article

Estimating noncooperative and cooperative models of bargaining: an empirical comparison

Author

Listed:
  • Masanori Mitsutsune
  • Takanori Adachi

Abstract

This paper examines the issue of model selection in studies of strategic situations. In particular, we compare estimation results from a noncooperative formulation of government formulation à la (Baron and Ferejohn in Am Poli Sci Rev 87:34–47, 1989 ) with those from two alternative cooperative formulations (Nash in Econometrica 18:155–162, 1950 ; Shapley and Shubik in Am Poli Sci Rev 48:787–792, 1954 ). Although the estimates of the ministerial ranking are similar, statistical testing suggests that the noncooperative formulation is best fitted to the observed data among the alternative models. This result implies that modeling the noncooperative structure in bargaining situations is crucially important at the risk of possibly misspecifying the details of the game. Copyright Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Masanori Mitsutsune & Takanori Adachi, 2014. "Estimating noncooperative and cooperative models of bargaining: an empirical comparison," Empirical Economics, Springer, vol. 47(2), pages 669-693, September.
    • Handle: RePEc:spr:empeco:v:47:y:2014:i:2:p:669-693
    DOI: 10.1007/s00181-013-0755-9
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s00181-013-0755-9
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s00181-013-0755-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. Baron, David P. & Ferejohn, John A., 1989. "Bargaining in Legislatures," American Political Science Review, Cambridge University Press, vol. 83(4), pages 1181-1206, December.
    3. Okada, Akira, 2011. "Coalitional bargaining games with random proposers: Theory and application," Games and Economic Behavior, Elsevier, vol. 73(1), pages 227-235, September.
    4. Predtetchinski, Arkadi, 2011. "One-dimensional bargaining," Games and Economic Behavior, Elsevier, vol. 72(2), pages 526-543, June.
    5. Merlo, Antonio & Wilson, Charles A, 1995. "A Stochastic Model of Sequential Bargaining with Complete Information," Econometrica, Econometric Society, vol. 63(2), pages 371-399, March.
    6. Eraslan, Hülya & McLennan, Andrew, 2013. "Uniqueness of stationary equilibrium payoffs in coalitional bargaining," Journal of Economic Theory, Elsevier, vol. 148(6), pages 2195-2222.
    7. Yoshikuni Ono, 2012. "Portfolio Allocation as Leadership Strategy: Intraparty Bargaining in Japan," American Journal of Political Science, John Wiley & Sons, vol. 56(3), pages 553-567, July.
    8. Yasutora Watanabe, 2008. "Ministerial Weights and Government Formation: Estimation Using a Bargaining Model," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 24(1), pages 95-119, May.
    9. Britz, Volker & Herings, P. Jean-Jacques & Predtetchinski, Arkadi, 2010. "Non-cooperative support for the asymmetric Nash bargaining solution," Journal of Economic Theory, Elsevier, vol. 145(5), pages 1951-1967, September.
    10. Laruelle, Annick & Valenciano, Federico, 2008. "Noncooperative foundations of bargaining power in committees and the Shapley-Shubik index," Games and Economic Behavior, Elsevier, vol. 63(1), pages 341-353, May.
    11. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, April.
    12. Tomohiko Kawamori, 2013. "Rejecter-proposer legislative bargaining with heterogeneous time and risk preferences," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(1), pages 27-40, January.
    13. Leiserson, Michael, 1968. "Factions and Coalitions in One-Party Japan: An Interpretation Based on the Theory of Games," American Political Science Review, Cambridge University Press, vol. 62(3), pages 770-787, September.
    14. Merlo, Antonio, 1997. "Bargaining over Governments in a Stochastic Environment," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 101-131, February.
    15. Patrick Francois & Ilia Rainer & Francesco Trebbi, 2015. "How Is Power Shared in Africa?," Econometrica, Econometric Society, vol. 83, pages 465-503, March.
    16. Hart, Sergiu & Mas-Colell, Andreu, 1996. "Bargaining and Value," Econometrica, Econometric Society, vol. 64(2), pages 357-380, March.
    17. Bombardini, Matilde & Trebbi, Francesco, 2011. "Votes or money? Theory and evidence from the US Congress," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 587-611, August.
    18. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    19. Okada, Akira, 2010. "The Nash bargaining solution in general n-person cooperative games," Journal of Economic Theory, Elsevier, vol. 145(6), pages 2356-2379, November.
    20. Ray, Debraj, 2007. "A Game-Theoretic Perspective on Coalition Formation," OUP Catalogue, Oxford University Press, number 9780199207954.
    21. James B. McDonald, 2008. "Some Generalized Functions for the Size Distribution of Income," Economic Studies in Inequality, Social Exclusion, and Well-Being, in: Duangkamon Chotikapanich (ed.), Modeling Income Distributions and Lorenz Curves, chapter 3, pages 37-55, Springer.
    22. Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, vol. 57(2), pages 307-333, March.
    23. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    24. Xingwei Hu, 2006. "An Asymmetric Shapley–Shubik Power Index," International Journal of Game Theory, Springer;Game Theory Society, vol. 34(2), pages 229-240, August.
    25. Shapley, L. S. & Shubik, Martin, 1954. "A Method for Evaluating the Distribution of Power in a Committee System," American Political Science Review, Cambridge University Press, vol. 48(3), pages 787-792, September.
    26. Eraslan, Hulya, 2002. "Uniqueness of Stationary Equilibrium Payoffs in the Baron-Ferejohn Model," Journal of Economic Theory, Elsevier, vol. 103(1), pages 11-30, March.
    27. Miyakawa, Toshiji, 2008. "Note on the equal split solution in an n-person noncooperative bargaining game," Mathematical Social Sciences, Elsevier, vol. 55(3), pages 281-291, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Akira Okada, 2015. "Cooperation and Institution in Games," The Japanese Economic Review, Japanese Economic Association, vol. 66(1), pages 1-32, March.
    2. Eraslan, Hülya & McLennan, Andrew, 2013. "Uniqueness of stationary equilibrium payoffs in coalitional bargaining," Journal of Economic Theory, Elsevier, vol. 148(6), pages 2195-2222.
    3. Alós-Ferrer, Carlos & Ritzberger, Klaus, 2021. "Multi-lateral strategic bargaining without stationarity," Journal of Mathematical Economics, Elsevier, vol. 97(C).
    4. Laruelle, Annick & Valenciano, Federico, 2008. "Noncooperative foundations of bargaining power in committees and the Shapley-Shubik index," Games and Economic Behavior, Elsevier, vol. 63(1), pages 341-353, May.
    5. Harstad, Bård, 2023. "Pledge-and-review bargaining," Journal of Economic Theory, Elsevier, vol. 207(C).
    6. Maria Montero, 2023. "Coalition Formation in Games with Externalities," Dynamic Games and Applications, Springer, vol. 13(2), pages 525-548, June.
    7. Maria Montero, 2023. "Coalition Formation in Games with Externalities," Dynamic Games and Applications, Springer, vol. 13(2), pages 525-548, June.
    8. Britz, Volker & Herings, P. Jean-Jacques & Predtetchinski, Arkadi, 2015. "Delay, multiplicity, and non-existence of equilibrium in unanimity bargaining games," Journal of Mathematical Economics, Elsevier, vol. 61(C), pages 192-202.
    9. Tasos Kalandrakis, 2006. "Proposal Rights and Political Power," American Journal of Political Science, John Wiley & Sons, vol. 50(2), pages 441-448, April.
    10. Herings, P. Jean-Jacques & Predtetchinski, Arkadi, 2010. "One-dimensional bargaining with Markov recognition probabilities," Journal of Economic Theory, Elsevier, vol. 145(1), pages 189-215, January.
    11. Herings, P. Jean-Jacques & Predtetchinski, Arkadi, 2011. "On the asymptotic uniqueness of bargaining equilibria," Economics Letters, Elsevier, vol. 111(3), pages 243-246, June.
    12. Ray, Debraj & Vohra, Rajiv, 2015. "Coalition Formation," Handbook of Game Theory with Economic Applications,, Elsevier.
    13. Joosung Lee, 2013. "Bargaining and Buyout," 2013 Papers ple701, Job Market Papers.
    14. P. Jean-Jacques Herings & Harold Houba, 2022. "Costless delay in negotiations," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 74(1), pages 69-93, July.
    15. James M. Snyder Jr. & Michael M. Ting & Stephen Ansolabehere, 2005. "Legislative Bargaining under Weighted Voting," American Economic Review, American Economic Association, vol. 95(4), pages 981-1004, September.
    16. Harstad, Bård, 2021. "A Theory of Pledge-and-Review Bargaining," Memorandum 5/2022, Oslo University, Department of Economics, revised 21 Jun 2021.
    17. Kawamori, Tomohiko & Miyakawa, Toshiji, 2019. "Bargaining delay under partial breakdowns and externalities," Economics Letters, Elsevier, vol. 183(C), pages 1-1.
    18. Zapechelnyuk, Andriy, 2013. "Eliciting information from a committee," Journal of Economic Theory, Elsevier, vol. 148(5), pages 2049-2067.
    19. Kalandrakis, Tasos, 2015. "Computation of equilibrium values in the Baron and Ferejohn bargaining model," Games and Economic Behavior, Elsevier, vol. 94(C), pages 29-38.
    20. Yasutora Watanabe, 2008. "Ministerial Weights and Government Formation: Estimation Using a Bargaining Model," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 24(1), pages 95-119, May.

    More about this item

    Keywords

    Model selection; Bargaining; Government formation ; Structural estimation; C52; C71; C72; C78; H19;
    All these keywords.

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • H19 - Public Economics - - Structure and Scope of Government - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:empeco:v:47:y:2014:i:2:p:669-693. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.