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Discounting and efficiency in coalitional bargaining with random proposers

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  • Tomohiko Kawamori

    (Graduate School of Economics, University of Tokyo)

Abstract

This paper analyzes a random-proposer coalitional bargaining game with different discount factors, which is a generalized version of Okada's (1996) model. We consider limit subgame efficiency which means that when the discount factors are sufficiently close to unity, the full coalition is formed in each subgame. In this paper, a negative result is shown: The limit subgame efficiency is attained if and only if values of the characteristic function are zero for all coalitions but the grand coalition. This result implies that under different discount factors, even under a naturally generalized condition of Okada''s necessary and sufficient condition for the limit subgame efficiency, the limit subgame efficiency is not necessarily achieved. On the other hand, it is shown that under a condition on the region of players'' discount factors, the generalized condition of Okada''s condition is almost necessary and sufficient for the limit subgame efficiency.

Suggested Citation

  • Tomohiko Kawamori, 2005. "Discounting and efficiency in coalitional bargaining with random proposers," Economics Bulletin, AccessEcon, vol. 3(40), pages 1-11.
    • Handle: RePEc:ebl:ecbull:eb-05c70032
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    References listed on IDEAS

    as
    1. Okada, Akira, 1996. "A Noncooperative Coalitional Bargaining Game with Random Proposers," Games and Economic Behavior, Elsevier, vol. 16(1), pages 97-108, September.
    2. Baron, David P. & Ferejohn, John A., 1989. "Bargaining in Legislatures," American Political Science Review, Cambridge University Press, vol. 83(4), pages 1181-1206, December.
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    More about this item

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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