Coalitional Bargaining Equilibria
AbstractThis paper takes up the foundational issue of existence of stationary subgame perfect equi- libria in a general class of coalitional bargaining games that includes many known bargaining models and models of coalition formation. General sufficient conditions for existence of equilib- ria are currently lacking in many interesting environments: bargaining models with non-concave stage utility functions, models with a Pareto optimal status quo alternative and heterogeneous discount factors, and models of coalition formation in public good economies with consumption lower bounds. This paper establishes existence of stationary equilibrium under compactness and continuity conditions, without the structure of convexity or comprehensiveness used in the extant literature. The proof requires a precise selection of voting equilibria following different proposals. The result is applied to obtain equilibria in models of bargaining over taxes, coalition formation in NTU environments, and collective dynamic programming problems.
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Bibliographic InfoPaper provided by University of Rochester - Wallis Institute of Political Economy in its series Wallis Working Papers with number WP62.
Length: 33 pages
Date of creation: May 2011
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-08-29 (All new papers)
- NEP-CDM-2011-08-29 (Collective Decision-Making)
- NEP-GTH-2011-08-29 (Game Theory)
- NEP-MIC-2011-08-29 (Microeconomics)
- NEP-NET-2011-08-29 (Network Economics)
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