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On bargaining partner selection when communication is restricted

Author

Listed:
  • Antoni Calvó-Armengol

    (Department of Economics, Universidad Carlos III, C/Madrid 126, 28903 Getafe , Spain and CERAS-ENPC, 28 rue des Saints-Pères, 75007 Paris, France)

Abstract

This paper analyzes the optimal selection of a bargaining partner when communication among players is restricted by an exogenously given graph. If players are equally patient, bargaining agreements are immune to players' locations, and the selection of a bargaining partner is not an issue. In contrast, when players differ in their discount factors, both location and impatience matter for bilateral agreements and partner selection becomes an issue. We show that selecting the most impatient neighbor is an equilibrium strategy whenever two players having a common neighbor share their most impatient neighbor. This condition is always satisfied by stratified graphs with no more than three strata. In the absence of this condition, cyclically-stratified graphs with no more than three strata also admit this equilibrium selection rule.

Suggested Citation

  • Antoni Calvó-Armengol, 2002. "On bargaining partner selection when communication is restricted," International Journal of Game Theory, Springer;Game Theory Society, vol. 30(4), pages 503-515.
    • Handle: RePEc:spr:jogath:v:30:y:2002:i:4:p:503-515
    Note: Received: November 2000/Final version: January 2002
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    Citations

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    Cited by:

    1. Matthew Elliott & Arun Chandrasekhar & Attila Ambrus, 2015. "Social Investments, Informal Risk Sharing, and Inequality," 2015 Meeting Papers 189, Society for Economic Dynamics.
    2. Attila Ambrus & Arun G. Chandrasekhar & Matt Elliott, 2014. "Social Investments, Informal Risk Sharing, and Inequality," NBER Working Papers 20669, National Bureau of Economic Research, Inc.
    3. Matteo M. Galizzi, 2009. "Bargaining and Networks in a Gas Bilateral Oligopoly," Working Papers 0906, University of Brescia, Department of Economics.
    4. Xavier Martinez-Giralt & Pedro Pita Barros, 2000. "Selecting Negotiation Processes with Health Care," UFAE and IAE Working Papers 467.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).

    More about this item

    Keywords

    Noncooperative bargaining · bargaining partner · communication network · time preferences.;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D20 - Microeconomics - - Production and Organizations - - - General

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