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Bargaining with commitments

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Listed author(s):
  • Juan J. Vidal-Puga

    ()

Abstract

We study a simple bargaining mechanism in which, given an order of players, the first n−1 players sequentially announce their reservation price. Once these prices are given, the last player may choose a coalition to cooperate with, and pay each member of this coalition his reservation price. The only expected final equilibrium payoff is a new solution concept, the “selective value”, which can be defined by means of marginal contributions vectors of a reduced game. The selective value coincides with the Shapley value for convex games. Moreover, for 3-player games the vectors of marginal contributions determine the core when it is nonempty. Copyright Springer-Verlag 2004

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File URL: http://hdl.handle.net/10.1007/s001820400190
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Article provided by Springer & Game Theory Society in its journal International Journal of Games Theory.

Volume (Year): 33 (2004)
Issue (Month): 1 (January)
Pages: 129-144

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Handle: RePEc:spr:jogath:v:33:y:2004:i:1:p:129-144
DOI: 10.1007/s001820400190
Contact details of provider: Web page: http://www.springer.com

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Order Information: Web: http://www.springer.com/economics/economic+theory/journal/182/PS2

Keywords: bargaining; demand commitment game; selective value;

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Find related papers by JEL classification:
  • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
  • 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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  1. Vidal-Puga, Juan & Bergantinos, Gustavo, 2003. "An implementation of the Owen value," Games and Economic Behavior, Elsevier, vol. 44(2), pages 412-427, August.
  2. Moldovanu, Benny & Winter, Eyal, 1994. "Core implementation and increasing returns to scale for cooperation," Journal of Mathematical Economics, Elsevier, vol. 23(6), pages 533-548, November.
  3. Fershtman, Chaim & Kalai, Ehud, 1997. "Unobserved Delegation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(4), pages 763-774, November.
  4. Harold Houba & Wilko Bolt, 1997. "Strategic bargaining in the variable threat game," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 11(1), pages 57-77.
  5. Bester, Helmut & Sakovics, Jozsef, 2001. "Delegated bargaining and renegotiation," Journal of Economic Behavior & Organization, Elsevier, vol. 45(4), pages 459-473, August.
  6. Michael L. Katz, 1991. "Game-Playing Agents: Unobservable Contracts as Precommitments," RAND Journal of Economics, The RAND Corporation, vol. 22(3), pages 307-328, Autumn.
  7. Bennett, E. & Van Damme, E., 1990. "Demand Commitment Bargaining: -The Case Of Apex Games," Papers 9062, Tilburg - Center for Economic Research.
  8. Crawford, Vincent P, 1982. "A Theory of Disagreement in Bargaining," Econometrica, Econometric Society, vol. 50(3), pages 607-637, May.
  9. Corts, Kenneth S. & Neher, Darwin V., 2003. "Credible delegation," European Economic Review, Elsevier, vol. 47(3), pages 395-407, June.
  10. Haller, Hans & Holden, Steinar, 1997. "Ratification Requirement and Bargaining Power," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(4), pages 825-851, November.
  11. Muthoo, Abhinay, 1992. "Revocable Commitment and Sequential Bargaining," Economic Journal, Royal Economic Society, vol. 102(411), pages 378-387, March.
  12. Winter, Eyal, 1994. "The Demand Commitment Bargaining and Snowballing Cooperation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 4(2), pages 255-273, March.
  13. (*), Y. Stephen Chiu & Ani Dasgupta, 1998. "On implementation via demand commitment games," International Journal of Game Theory, Springer;Game Theory Society, vol. 27(2), pages 161-189.
  14. Muthoo, Abhinay, 1996. "A Bargaining Model Based on the Commitment Tactic," Journal of Economic Theory, Elsevier, vol. 69(1), pages 134-152, April.
  15. Hart, Sergiu & Mas-Colell, Andreu, 1996. "Bargaining and Value," Econometrica, Econometric Society, vol. 64(2), pages 357-380, March.
  16. Selten,Reinhard, "undated". "A demand commitment model of coalition bargaining," Discussion Paper Serie B 191, University of Bonn, Germany.
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Cited by:

  1. Chen, Ying & Eraslan, Hulya, 2014. "Rhetoric in legislative bargaining with asymmetric information," Theoretical Economics, Econometric Society, vol. 9(2), May.
  2. Montero, Maria & Vidal-Puga, Juan J., 2011. "Demand bargaining and proportional payoffs in majority games," Games and Economic Behavior, Elsevier, vol. 71(2), pages 395-408, March.
  3. Breitmoser, Yves & Tan, Jonathan H.W., 2013. "Reference dependent altruism in demand bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 92(C), pages 127-140.
  4. Roberto Serrano, 2005. "Fifty years of the Nash program, 1953-2003," Investigaciones Economicas, Fundación SEPI, vol. 29(2), pages 219-258, May.
  5. Ying Chen, 2010. "Rhetoric in Legislative Bargaining with Asymmetric Information," 2010 Meeting Papers 1159, Society for Economic Dynamics.
  6. Yves Breitmoser, 2009. "Demand commitments in majority bargaining or how formateurs get their way," International Journal of Game Theory, Springer;Game Theory Society, vol. 38(2), pages 183-191, June.
  7. Maria Montero & Juan Vidal-Puga, 2012. "A Violation of Monotonicity in a Noncooperative Setting," Discussion Papers 2012-04, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  8. Maria Montero & Juan Vidal-Puga, 2005. "Demand commitment in legislative bargaining," Game Theory and Information 0511005, EconWPA.
  9. Breitmoser, Yves, 2011. "Binomial menu auctions in government formation," MPRA Paper 28576, University Library of Munich, Germany.
  10. Trudeau, Christian & Vidal-Puga, Juan, 2017. "On the set of extreme core allocations for minimal cost spanning tree problems," Journal of Economic Theory, Elsevier, vol. 169(C), pages 425-452.
  11. Yuan Ju & David Wettstein, 2009. "Implementing cooperative solution concepts: a generalized bidding approach," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 39(2), pages 307-330, May.
  12. Macho-Stadler, Ines & Perez-Castrillo, David & Wettstein, David, 2006. "Efficient bidding with externalities," Games and Economic Behavior, Elsevier, vol. 57(2), pages 304-320, November.
  13. Breitmoser, Yves & Tan, Jonathan H.W., 2011. "Ultimata bargaining: generosity without social motives," MPRA Paper 33613, University Library of Munich, Germany.

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