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A Violation of Monotonicity in a Noncooperative Setting

Author

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  • Maria Montero

    (School of Economics, University of Nottingham)

  • Juan Vidal-Puga

    (Faculty of Economics and Management, Universidade de Vigo)

Abstract

A power measure is monotone if a player with a larger weight is assigned at least as much power as a player with a smaller weight in the same weighted majority game. Failure of a power index to satisfy monotonicity is often considered a pathological feature. In this paper, we show that monotonicity may fail in the unique subgame perfect equilibrium of a noncooperative bargaining game. A player with a smaller weight may have a higher expected payoff than a player with a larger weight. This is possible even though coalition formation and payoff division are endogenous, all players are rational and there is no asymmetry between the players other than in the weights.

Suggested Citation

  • Maria Montero & Juan Vidal-Puga, 2012. "A Violation of Monotonicity in a Noncooperative Setting," Discussion Papers 2012-04, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    • Handle: RePEc:not:notcdx:2012-04
    as

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    References listed on IDEAS

    as
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    Keywords

    monotonicity; noncoopeative;

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