Competitive Bargaining Equilibria
AbstractWe propose a simple bargaining procedure, the equilibrium of which converges to the Walrasian allocation as the agents become increasingly patient. We thus establish that the competitive outcome obtains even if agents have market power and are not price-takers. Moreover, where in other bargaining protocols the final outcome depends on bargaining power or relative impatience, the outcome here is determinate and depends only on preferences and endowments. This procedure has therefore important implications for policy applications compared to standard bargaining rules.
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Bibliographic InfoPaper provided by Université Panthéon-Sorbonne (Paris 1) in its series Cahiers de la Maison des Sciences Economiques with number b04067.
Length: 37 pages
Date of creation: Apr 2004
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Alternating-offers bargaining; Walrasian equilibrium; price-setting; quantity constraints.;
Other versions of this item:
- C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
- D41 - Microeconomics - - Market Structure and Pricing - - - Perfect Competition
- D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-03-13 (All new papers)
- NEP-BEC-2005-03-13 (Business Economics)
- NEP-GTH-2005-03-13 (Game Theory)
- NEP-MIC-2005-03-13 (Microeconomics)
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