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Demand bargaining and proportional payoffs in majority games

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  • Montero, Maria
  • Vidal-Puga, Juan J.

Abstract

We study a majoritarian bargaining model in which players make payoff demands in decreasing order of voting weight. The unique subgame perfect equilibrium outcome is such that the minimal winning coalition of the players that move first forms with payoffs proportional to the voting weights. This result advances previous analysis in terms of one or more of the following: a) the simplicity of the extensive form (finite horizon with a predetermined order of moves); b) the range of the majority games covered; c) the equilibrium concept (subgame perfect equilibrium is sufficient for a unique prediction).

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Bibliographic Info

Article provided by Elsevier in its journal Games and Economic Behavior.

Volume (Year): 71 (2011)
Issue (Month): 2 (March)
Pages: 395-408

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Handle: RePEc:eee:gamebe:v:71:y:2011:i:2:p:395-408

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Web page: http://www.elsevier.com/locate/inca/622836

Related research

Keywords: Demand bargaining Coalition formation Weighted majority games Minimal winning coalitions;

References

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  1. Bloch, Francis & Rottier, Stéphane, 1999. "Agenda Control in Coalition Formation," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1999034, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  2. Massimo Morelli & Maria Montero, 2001. "The Demand Bargaining Set: General Characterization and Application to Majority Games," Economics Working Papers 0011, Institute for Advanced Study, School of Social Science.
  3. Mika Widgrén & Stefan Napel, 2001. "Inferior players in simple games," International Journal of Game Theory, Springer, vol. 30(2), pages 209-220.
  4. Norman,P., 2000. "Legislative bargaining and coalition formation," Working papers 12, Wisconsin Madison - Social Systems.
  5. Maschler, Michael, 1992. "The bargaining set, kernel, and nucleolus," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 18, pages 591-667 Elsevier.
  6. (*), Y. Stephen Chiu & Ani Dasgupta, 1998. "On implementation via demand commitment games," International Journal of Game Theory, Springer, vol. 27(2), pages 161-189.
  7. Juan J. Vidal-Puga, 2004. "Bargaining with commitments," International Journal of Game Theory, Springer, vol. 33(1), pages 129-144, January.
  8. Daniel Diermeier & Antoni Merlo, 1999. "An Empirical Investigation of Coalitional Bargaining Procedures," Discussion Papers 1267, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  9. Montero, Maria, 2006. "Noncooperative foundations of the nucleolus in majority games," Games and Economic Behavior, Elsevier, vol. 54(2), pages 380-397, February.
  10. Tasos Kalandrakis, 2004. "Proposal Rights and Political Power," Wallis Working Papers WP38, University of Rochester - Wallis Institute of Political Economy.
  11. Daniel Cardona-Coll & Francisco M. Mancera, 2000. "Demand bargaining in legislatures," Economic Theory, Springer, vol. 16(1), pages 163-180.
  12. Ariel Rubinstein, 2010. "Perfect Equilibrium in a Bargaining Model," Levine's Working Paper Archive 252, David K. Levine.
  13. Daniel Diermeier & Hulya Eraslan & Antonio Merlo, 2003. "A Structural Model of Government Formation," Econometrica, Econometric Society, vol. 71(1), pages 27-70, January.
  14. Chatterjee, Kalyan & Bhaskar Dutta & Debraj Ray & Kunal Sengupta, 1993. "A Noncooperative Theory of Coalitional Bargaining," Review of Economic Studies, Wiley Blackwell, vol. 60(2), pages 463-77, April.
  15. G Frechette & J Kagel & M Morelli, 2004. "Behavioral Identification in Coalition Bargaining: An Experimental Analysis of Demand Bargaining and Alternating Offers," Levine's Bibliography 122247000000000006, UCLA Department of Economics.
  16. Winter, Eyal, 1994. "The Demand Commitment Bargaining and Snowballing Cooperation," Economic Theory, Springer, vol. 4(2), pages 255-73, March.
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Citations

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Cited by:
  1. M. Puy, 2013. "Stable coalition governments: the case of three political parties," Social Choice and Welfare, Springer, vol. 40(1), pages 65-87, January.
  2. Breitmoser, Yves & Tan, Jonathan H.W., 2013. "Reference dependent altruism in demand bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 92(C), pages 127-140.
  3. 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.
  4. Breitmoser, Yves & Tan, Jonathan H.W., 2011. "Ultimata bargaining: generosity without social motives," MPRA Paper 33613, University Library of Munich, Germany.
  5. Breitmoser, Yves, 2011. "Binomial menu auctions in government formation," MPRA Paper 28576, University Library of Munich, Germany.
  6. Joosung Lee, 2013. "Bargaining and Buyout," 2013 Papers ple701, Job Market Papers.

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