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Multi-agent bilateral bargaining and the Nash bargaining solution

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  • Suh, Sang-Chul
  • Wen, Quan

Abstract

This paper studies a bargaining model where n players play a sequence of (n-1) bilateral bargaining sessions. In each bilateral bargaining session, two players follow the same bargaining process as in Rubinstein's (1982). A partial agreement between two players is reached in the session and one player effectively leaves the game with a share agreed upon in the partial agreement and the other moves on to the next session. Such a (multi-agent) bilateral bargaining model admits a unique subgame perfect equilibrium. Depending on who exits and who stays, we consider two bargaining procedures. The equilibrium outcomes under the two bargaining procedures converge to the Nash (1950) bargaining solution of the corresponding bargaining problem as the players' discount factor goes to one. Thus, the bilateral bargaining model studied in this paper provides a non-cooperative foundation for the Nash cooperative bargaining solution in the multilateral case.
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  • Suh, Sang-Chul & Wen, Quan, 2006. "Multi-agent bilateral bargaining and the Nash bargaining solution," Journal of Mathematical Economics, Elsevier, vol. 42(1), pages 61-73, February.
  • Handle: RePEc:eee:mateco:v:42:y:2006:i:1:p:61-73
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Herings P. Jean-Jacques & Britz Volker & Predtetchinski Arkadi, 2012. "On the Convergence to Nash Bargaining Solution for Endogenous Bargaining Protocols," Research Memorandum 030, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    2. Bedayo, Mikel & Mauleon, Ana & Vannetelbosch, Vincent, 2016. "Bargaining in endogenous trading networks," Mathematical Social Sciences, Elsevier, vol. 80(C), pages 70-82.
    3. Edwin L.-C. Lai, 2008. "The most-favored nation rule in club enlargement negotiation," Working Papers 0815, Federal Reserve Bank of Dallas.
    4. Sang-Chul Suh & Quan Wen, 2003. "Multi-Agent Bilateral Bargaining with Endogenous Protocol," Vanderbilt University Department of Economics Working Papers 0305, Vanderbilt University Department of Economics.
    5. Alejandro Caparrós, 2016. "Bargaining and International Environmental Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(1), pages 5-31, September.
    6. P. Herings & Arkadi Predtetchinski, 2012. "Sequential share bargaining," International Journal of Game Theory, Springer;Game Theory Society, vol. 41(2), pages 301-323, May.
    7. Britz, Volker & Herings, P. Jean-Jacques & Predtetchinski, Arkadi, 2014. "On the convergence to the Nash bargaining solution for action-dependent bargaining protocols," Games and Economic Behavior, Elsevier, vol. 86(C), pages 178-183.
    8. Vidal-Puga, Juan J., 2008. "Forming coalitions and the Shapley NTU value," European Journal of Operational Research, Elsevier, vol. 190(3), pages 659-671, November.
    9. Fabien Tripier, 2014. "A Search-Theoretic Approach to Efficient Financial Intermediation," Working Papers 2014-18, CEPII research center.
    10. Klaus Kultti & Hannu Vartiainen, 2010. "Multilateral non-cooperative bargaining in a general utility space," International Journal of Game Theory, Springer;Game Theory Society, vol. 39(4), pages 677-689, October.
    11. Yi-Chun Chen & Xiao Luo, 2008. "Delay in a bargaining game with contracts," Theory and Decision, Springer, vol. 65(4), pages 339-353, December.
    12. Sang-Chul Suh & Quan Wen, 2009. "A multi-agent bilateral bargaining model with endogenous protocol," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 40(2), pages 203-226, August.
    13. repec:spr:jogath:v:46:y:2017:i:4:d:10.1007_s00182-017-0567-9 is not listed on IDEAS

    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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