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The effects of third-party transfers in sequential anchored bargaining

Author

Listed:
  • Suchan Chae

    (Korea Advanced Institute of Science and Technology)

  • Seho Kim

    (University of Maryland)

Abstract

We analyze a bargaining game where an anchor player bargains sequentially with n non-anchor players over the division of a pie in the presence of third-party transfers and show that there exists a unique perfect equilibrium. A lump-sum transfer is jointly shared by all players, while a transfer proportional to a player’s share affects only the party that has to make that transfer. When lump-sum transfers are zero, the anchor player and each non-anchor player bargain as if there is no further bargaining. It turns out that the anchor player and the last non-anchor player are in the most disadvantageous position with our bargaining protocol.

Suggested Citation

  • Suchan Chae & Seho Kim, 2019. "The effects of third-party transfers in sequential anchored bargaining," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(1), pages 143-155, March.
    • Handle: RePEc:spr:jogath:v:48:y:2019:i:1:d:10.1007_s00182-018-00657-x
    DOI: 10.1007/s00182-018-00657-x
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    References listed on IDEAS

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    More about this item

    Keywords

    Sequential bargaining; Anchored bargaining; Tax incidence;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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