Outcomes of bargaining and planning in single facility location problems
In this paper, we investigate a model where, on a tree network, players collectively choose the location of a single public facility by noncooperative alternating-offer bargaining with the unanimity rule. We show the existence of a stationary subgame perfect equilibrium and the characterization of stationary subgame perfect equilibria. We also show that the equilibrium location converges to the Rawls location (the Rawlsian social welfare maximizer) as the discount factor tends to 1; however, it does not relate to the Weber location (the Benthamite social welfare maximizer).
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- Ariel Rubinstein, 2010.
"Perfect Equilibrium in a Bargaining Model,"
Levine's Working Paper Archive
661465000000000387, David K. Levine.
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- Campos Rodriguez, Clara M. & Moreno Perez, Jose A., 2003. "Relaxation of the Condorcet and Simpson conditions in voting location," European Journal of Operational Research, Elsevier, vol. 145(3), pages 673-683, March.
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- Hansen, Pierre & Thisse, Jacques-Francois, 1981. "Outcomes of voting and planning : Condorcet, Weber and Rawls locations," Journal of Public Economics, Elsevier, vol. 16(1), pages 1-15, August.
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