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On the Non-Cooperative Foundations of Cooperative Bargaining

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  • Corchon, Luis
  • Ritzberger, Klaus

Abstract

In this note we challenge the non-cooperative foundations of cooperative bargaining solutions on the grounds that the limit operation for approaching a frictionless world is not robusto We show that when discounting almost ceases to play a role, any individually rational payoff can be supported by some subgame perfect equilibrium. To select the "correct" point imposes excessive informationaL requirements on the analyst.

Suggested Citation

  • Corchon, Luis & Ritzberger, Klaus, 1992. "On the Non-Cooperative Foundations of Cooperative Bargaining," MPRA Paper 18461, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:18461
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    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. James W. Friedman, 1971. "A Non-cooperative Equilibrium for Supergames," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(1), pages 1-12.
    3. Chae, Suchan & Yang, Jeong-Ae, 1988. "The unique perfect equilibrium of an n-person bargaining game," Economics Letters, Elsevier, vol. 28(3), pages 221-223.
    4. Rubinstein, Ariel & Wolinsky, Asher, 1985. "Equilibrium in a Market with Sequential Bargaining," Econometrica, Econometric Society, vol. 53(5), pages 1133-1150, September.
    5. Yang, Jeong-Ae, 1992. "Another n-person bargaining game with a unique perfect equilibrium," Economics Letters, Elsevier, vol. 38(3), pages 275-277, March.
    6. Drew Fudenberg & Eric Maskin, 2008. "The Folk Theorem In Repeated Games With Discounting Or With Incomplete Information," World Scientific Book Chapters, in: Drew Fudenberg & David K Levine (ed.), A Long-Run Collaboration On Long-Run Games, chapter 11, pages 209-230, World Scientific Publishing Co. Pte. Ltd..
    7. Sjostrom, Tomas, 1991. "Stahl's bargaining model," Economics Letters, Elsevier, vol. 36(2), pages 153-157, June.
    8. Martin J. Osborne & Ariel Rubinstein, 2005. "Bargaining and Markets," Levine's Bibliography 666156000000000515, UCLA Department of Economics.
    9. Muthoo, Abhinay, 1992. "Revocable Commitment and Sequential Bargaining," Economic Journal, Royal Economic Society, vol. 102(411), pages 378-387, March.
    10. Asheim, Geir B., 1992. "A unique solution to n-person sequential bargaining," Games and Economic Behavior, Elsevier, vol. 4(2), pages 169-181, April.
    11. John Sutton, 1986. "Non-Cooperative Bargaining Theory: An Introduction," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 53(5), pages 709-724.
    12. Shaked, Avner & Sutton, John, 1984. "Involuntary Unemployment as a Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 52(6), pages 1351-1364, November.
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    More about this item

    Keywords

    Subgame Perfection Rubinstein Game;

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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