IDEAS home Printed from https://ideas.repec.org/p/unm/umamet/2009042.html
   My bibliography  Save this paper

Bargaining with non-convexities

Author

Listed:
  • Herings, P.J.J.

    (Microeconomics & Public Economics)

  • Predtetchinski, A.

    (Microeconomics & Public Economics)

Abstract

We consider the canonical non-cooperative multilateral bargaining game with a set of feasible payoffs that is closed and comprehensive from below, contains the disagreement point in its interior, and is such that the individually rational payoffs are bounded. We show that a pure stationary subgame perfect equilibrium having the no-delay property exists, even when the space of feasible payoffs is not convex. We also have the converse result that randomization will not be used in this environment in the sense that all stationary subgame perfect equilibria do not involve randomization on the equilibrium path. Nevertheless, mixed strategy profiles can lead to Pareto superior payoffs in the non-convex case.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Herings, P.J.J. & Predtetchinski, A., 2009. "Bargaining with non-convexities," Research Memorandum 042, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    • Handle: RePEc:unm:umamet:2009042
    DOI: 10.26481/umamet.2009042
    as

    Download full text from publisher

    File URL: https://cris.maastrichtuniversity.nl/ws/files/1560899/guid-d42bfc76-c128-44c7-aedb-d1b2c7585eb3-ASSET1.0.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.26481/umamet.2009042?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
    ---><---

    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. 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.
    3. Lin Zhou, 1997. "The Nash Bargaining Theory with Non-Convex Problems," Econometrica, Econometric Society, vol. 65(3), pages 681-686, May.
    4. Tasos Kalandrakis, 2006. "Regularity of pure strategy equilibrium points in a class of bargaining games," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 28(2), pages 309-329, June.
    5. Lang, Kevin & Rosenthal, Robert W, 2001. "Bargaining Piecemeal or All at Once?," Economic Journal, Royal Economic Society, vol. 111(473), pages 526-540, July.
    6. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, April.
    7. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    8. Robert Shimer, 2006. "On-the-Job Search and Strategic Bargaining," Contributions to Economic Analysis, in: Structural Models of Wage and Employment Dynamics, pages 37-59, Emerald Group Publishing Limited.
    9. Conley, John P. & Wilkie, Simon, 1996. "An Extension of the Nash Bargaining Solution to Nonconvex Problems," Games and Economic Behavior, Elsevier, vol. 13(1), pages 26-38, March.
    10. Herbert Scarf, 1994. "The Allocation of Resources in the Presence of Indivisibilities," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 111-128, Fall.
    11. Xu, Yongsheng & Yoshihara, Naoki, 2006. "Alternative characterizations of three bargaining solutions for nonconvex problems," Games and Economic Behavior, Elsevier, vol. 57(1), pages 86-92, October.
    12. In, Younghwan & Serrano, Roberto, 2004. "Agenda restrictions in multi-issue bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 53(3), pages 385-399, March.
    13. Kalandrakis, Tasos, 2004. "Equilibria in sequential bargaining games as solutions to systems of equations," Economics Letters, Elsevier, vol. 84(3), pages 407-411, September.
    14. Herrero, Maria Jose, 1989. "The nash program: Non-convex bargaining problems," Journal of Economic Theory, Elsevier, vol. 49(2), pages 266-277, December.
    15. Eraslan, Hulya & Merlo, Antonio, 2002. "Majority Rule in a Stochastic Model of Bargaining," Journal of Economic Theory, Elsevier, vol. 103(1), pages 31-48, March.
    16. Banks, Jeffrey s. & Duggan, John, 2000. "A Bargaining Model of Collective Choice," American Political Science Review, Cambridge University Press, vol. 94(1), pages 73-88, March.
    17. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Duggan, John, 2017. "Existence of stationary bargaining equilibria," Games and Economic Behavior, Elsevier, vol. 102(C), pages 111-126.
    2. Alós-Ferrer, Carlos & Ritzberger, Klaus, 2021. "Multi-lateral strategic bargaining without stationarity," Journal of Mathematical Economics, Elsevier, vol. 97(C).
    3. Britz, V. & Herings, P.J.J. & Predtetchinski, A., 2014. "Equilibrium delay and non-existence of equilibrium in unanimity bargaining games," Research Memorandum 019, Maastricht University, Graduate School of Business and Economics (GSBE).
    4. 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.

    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. Alós-Ferrer, Carlos & Ritzberger, Klaus, 2021. "Multi-lateral strategic bargaining without stationarity," Journal of Mathematical Economics, Elsevier, vol. 97(C).
    2. 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.
    3. Tasos Kalandrakis, 2006. "Regularity of pure strategy equilibrium points in a class of bargaining games," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 28(2), pages 309-329, June.
    4. Duggan, John & Kalandrakis, Tasos, 2012. "Dynamic legislative policy making," Journal of Economic Theory, Elsevier, vol. 147(5), pages 1653-1688.
    5. 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.
    6. 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.
    7. Zapal, Jan, 2020. "Simple Markovian equilibria in dynamic spatial legislative bargaining," European Journal of Political Economy, Elsevier, vol. 63(C).
    8. Cho, Seok-ju & Duggan, John, 2009. "Bargaining foundations of the median voter theorem," Journal of Economic Theory, Elsevier, vol. 144(2), pages 851-868, March.
    9. Duggan, John, 2017. "Existence of stationary bargaining equilibria," Games and Economic Behavior, Elsevier, vol. 102(C), pages 111-126.
    10. Can, Burak, 2014. "Weighted distances between preferences," Journal of Mathematical Economics, Elsevier, vol. 51(C), pages 109-115.
    11. 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.
    12. Eraslan, Hülya & McLennan, Andrew, 2013. "Uniqueness of stationary equilibrium payoffs in coalitional bargaining," Journal of Economic Theory, Elsevier, vol. 148(6), pages 2195-2222.
    13. Herings, P. Jean-Jacques & Predtetchinski, Arkadi, 2011. "On the asymptotic uniqueness of bargaining equilibria," Economics Letters, Elsevier, vol. 111(3), pages 243-246, June.
    14. Herings, P. Jean-Jacques & Meshalkin, Andrey & Predtetchinski, Arkadi, 2017. "A one-period memory folk theorem for multilateral bargaining games," Games and Economic Behavior, Elsevier, vol. 103(C), pages 185-198.
    15. Cho, Seok-ju & Duggan, John, 2003. "Uniqueness of stationary equilibria in a one-dimensional model of bargaining," Journal of Economic Theory, Elsevier, vol. 113(1), pages 118-130, November.
    16. Eraslan, Hülya & Merlo, Antonio, 2017. "Some unpleasant bargaining arithmetic?," Journal of Economic Theory, Elsevier, vol. 171(C), pages 293-315.
    17. P. Herings & Arkadi Predtetchinski, 2012. "Sequential share bargaining," International Journal of Game Theory, Springer;Game Theory Society, vol. 41(2), pages 301-323, May.
    18. Samuel Danthine & Noemí Navarro, 2013. "How to Add Apples and Pears: Non-Symmetric Nash Bargaining and the Generalized Joint Surplus," Economics Bulletin, AccessEcon, vol. 33(4), pages 2840-2850.
    19. David H. Wolpert & James Bono, 2010. "A theory of unstructured bargaining using distribution-valued solution concepts," Working Papers 2010-14, American University, Department of Economics.
    20. Herings, P. Jean-Jacques & Meshalkin, Andrey & Predtetchinski, Arkadi, 2018. "Subgame perfect equilibria in majoritarian bargaining," Journal of Mathematical Economics, Elsevier, vol. 76(C), pages 101-112.

    More about this item

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:unm:umamet:2009042. 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: Andrea Willems or Leonne Portz (email available below). General contact details of provider: https://edirc.repec.org/data/meteonl.html .

    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.