Efficiency Does Not Imply Immediate Agreement
AbstractGul (Econometrica, 1989) introduces a non-cooperative bargaining procedure and claims that the payoffs of the resulting efficient stationary subgame perfect equilibria are close to the Shapley value of the underlying transferable utility game (when the discount factor is close to 1). We exhibit here an example showing that efficiency, even for strictly super-additive games, does not imply that all meetings end in agreement. Thus efficiency does not suffice to get Gul's result.
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Date of creation: 28 Sep 1997
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Other versions of this item:
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D4 - Microeconomics - - Market Structure and Pricing
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