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Bargaining with a Bureaucrat

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  • Yair Tauman
  • Andriy Zapechelnyuk

Abstract

We consider a bargaining problem where one of the players, the bureaucrat, has the power to dictate any outcome in a given set. The other players, the agents, negotiate with him which outcome to be dictated. In return, the agents transfer some part of their payoffs to the bureaucrat. We state five axioms and characterize the solutions which satisfy these axioms on a class of problems which includes as a subset all submodular bargaining problems. Every solution is characterized by a number a in the unit interval. Each agent in every bargaining problem obtains a weighted average of his individually rational level and his marginal contribution to the set of all players, where the weights are a and 1 - a , respectively. The bureaucrat obtains the remaing surplus. The solution when a = 1/2 is the nucleolus of a naturally related game in characteristic form.
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Suggested Citation

  • Yair Tauman & Andriy Zapechelnyuk, 2006. "Bargaining with a Bureaucrat," Levine's Bibliography 321307000000000108, UCLA Department of Economics.
  • Handle: RePEc:cla:levrem:321307000000000108
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    References listed on IDEAS

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    1. Morton I. Kamien & Yair Tauman, 1986. "Fees Versus Royalties and the Private Value of a Patent," The Quarterly Journal of Economics, Oxford University Press, vol. 101(3), pages 471-491.
    2. Vincent Feltkamp & Javier Arin, 1997. "The Nucleolus and Kernel of Veto-Rich Transferable Utility Games," International Journal of Game Theory, Springer;Game Theory Society, vol. 26(1), pages 61-73.
    3. Buch, Ishay & Tauman, Yair, 1992. "Bargaining with a Ruler," International Journal of Game Theory, Springer;Game Theory Society, vol. 21(2), pages 131-148.
    4. B. Douglas Bernheim & Michael D. Whinston, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 101(1), pages 1-31.
    5. Kamien, Morton I., 1992. "Patent licensing," Handbook of Game Theory with Economic Applications,in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 11, pages 331-354 Elsevier.
    6. Kamien, Morton I. & Tauman, Yair & Zamir, Shmuel, 1990. "On the value of information in a strategic conflict," Games and Economic Behavior, Elsevier, vol. 2(2), pages 129-153, June.
    7. Kamien, Morton I. & Oren, Shmuel S. & Tauman, Yair, 1992. "Optimal licensing of cost-reducing innovation," Journal of Mathematical Economics, Elsevier, vol. 21(5), pages 483-508.
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    Cited by:

    1. Martimort, David & Semenov, Aggey, 2008. "The informational effects of competition and collusion in legislative politics," Journal of Public Economics, Elsevier, vol. 92(7), pages 1541-1563, July.

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