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Uniqueness of stationary equilibrium payoffs in the Baron–Ferejohn model with risk-averse players

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  • Hülya Eraslan

Abstract

I study a multilateral sequential bargaining model among risk averse players in which the players may differ in their probability of being selected as the proposer and the rate at which they discount future payoffs. For games in which agreement requires less than unanimous consent, I characterize the set of stationary subgame perfect equilibrium payoffs. With this characterization, I establish the uniqueness of the equilibrium payoffs. For the case where the players have the same discount factor, I show that the payoff to a player is nondecreasing in his probability of being selected as the proposer. For the case where the players have the same probability of being selected as the proposer, I show that the payoff to a player is nondecreasing in his discount factor. This generalizes Eraslan [2002] by allowing the players to be risk averse.
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  • Hülya Eraslan, 2016. "Uniqueness of stationary equilibrium payoffs in the Baron–Ferejohn model with risk-averse players," International Journal of Economic Theory, The International Society for Economic Theory, vol. 12(1), pages 29-40, March.
    • Handle: RePEc:bla:ijethy:v:12:y:2016:i:1:p:29-40
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    File URL: http://hdl.handle.net/10.1111/ijet.12078
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    References listed on IDEAS

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    1. Kalandrakis, Tasos, 2015. "Computation of equilibrium values in the Baron and Ferejohn bargaining model," Games and Economic Behavior, Elsevier, vol. 94(C), pages 29-38.
    2. Tomohiko Kawamori, 2005. "Players' Patience and Equilibrium Payoffs in the Baron-Ferejohn Model," Economics Bulletin, AccessEcon, vol. 3(43), pages 1-5.
    3. Baron, David P. & Ferejohn, John A., 1989. "Bargaining in Legislatures," American Political Science Review, Cambridge University Press, vol. 83(4), pages 1181-1206, December.
    4. repec:ebl:ecbull:v:3:y:2005:i:43:p:1-5 is not listed on IDEAS
    5. Banks, Jeffrey s. & Duggan, John, 2000. "A Bargaining Model of Collective Choice," American Political Science Review, Cambridge University Press, vol. 94(1), pages 73-88, March.
    6. Eraslan, Hülya & McLennan, Andrew, 2013. "Uniqueness of stationary equilibrium payoffs in coalitional bargaining," Journal of Economic Theory, Elsevier, vol. 148(6), pages 2195-2222.
    7. Eraslan, Hulya, 2002. "Uniqueness of Stationary Equilibrium Payoffs in the Baron-Ferejohn Model," Journal of Economic Theory, Elsevier, vol. 103(1), pages 11-30, March.
    8. Harrington, Joseph E, Jr, 1990. "The Power of the Proposal Maker in a Model of Endogenous Agenda Formation," Public Choice, Springer, vol. 64(1), pages 1-20, January.
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    Cited by:

    1. Evdokimov, Kirill S., 2020. "Uniqueness of equilibrium payoffs in the stochastic model of bargaining," Economics Letters, Elsevier, vol. 188(C).

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