IDEAS home Printed from https://ideas.repec.org/p/cte/werepe/we016121.html
   My bibliography  Save this paper

Bargaining in networks and the myerson value

Author

Listed:
  • Navarro, Noemí
  • Perea, Andrés

Abstract

We focus on a multiperson bargaining situation where the negotiation possibilities for the players are represented by a graph, that is, two players can negotiate directly with each other if and only if they are linked directly in the graph. The value of cooperation among players is given by a TU game. For the case where the graph is a tree and the TU game is strictly convex we present a noncooperative bargaining procedure, consisting of a sequence of bilateral negotiations, for which the unique subgame perfect equilibrium outcome coincides with the Myerson value of the induced graph-restricted game. In each bilateral negotiation, the corresponding pair of players bargains about the difference in payoffs to be received at the end. At the beginning of such negotiation there is a bidding stage in which both players announce prices. The player with the highest price becomes the proposer and makes a take-it-or-leave-it offer in terms of difference in payoffs to the other player. If the proposal is rejected, the proposer pays his announced price to the other player, after which this particular link is eliminated from the graph and the mechanism starts all over again for the remaining graph.

Suggested Citation

  • Navarro, Noemí & Perea, Andrés, 2001. "Bargaining in networks and the myerson value," UC3M Working papers. Economics we016121, Universidad Carlos III de Madrid. Departamento de Economía.
    • Handle: RePEc:cte:werepe:we016121
    as

    Download full text from publisher

    File URL: https://e-archivo.uc3m.es/bitstream/handle/10016/263/we016121.pdf?sequence=1
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Perez-Castrillo, David & Wettstein, David, 2001. "Bidding for the Surplus : A Non-cooperative Approach to the Shapley Value," Journal of Economic Theory, Elsevier, vol. 100(2), pages 274-294, October.
    2. Moulin, H., 1984. "Implementing the Kalai-Smorodinsky bargaining solution," Journal of Economic Theory, Elsevier, vol. 33(1), pages 32-45, June.
    3. Jackson, Matthew O. & Wolinsky, Asher, 1996. "A Strategic Model of Social and Economic Networks," Journal of Economic Theory, Elsevier, vol. 71(1), pages 44-74, October.
    4. 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.
    5. (*), 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.
    6. Roger B. Myerson, 1977. "Graphs and Cooperation in Games," Mathematics of Operations Research, INFORMS, vol. 2(3), pages 225-229, August.
    7. Suresh Mutuswami & David Pérez-Castrillo & David Wettstein, 2001. "Bidding for the Surplus: Realizing Efficient Outcomes in General Economic Environments," UFAE and IAE Working Papers 479.01, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    8. Hart, Sergiu & Mas-Colell, Andreu, 1996. "Bargaining and Value," Econometrica, Econometric Society, vol. 64(2), pages 357-380, March.
    9. Gul, Faruk, 1989. "Bargaining Foundations of Shapley Value," Econometrica, Econometric Society, vol. 57(1), pages 81-95, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Navarro, Noemí & Veszteg, Róbert F., 2011. "Demonstration of power: Experimental results on bilateral bargaining," Journal of Economic Psychology, Elsevier, vol. 32(5), pages 762-772.
    2. Pin, Paolo, 2011. "Eight degrees of separation," Research in Economics, Elsevier, vol. 65(3), pages 259-270, September.
    3. Jackson, Matthew O., 2005. "Allocation rules for network games," Games and Economic Behavior, Elsevier, vol. 51(1), pages 128-154, April.
    4. Juan Vidal-Puga, 2005. "Implementation of the Levels Structure Value," Annals of Operations Research, Springer, vol. 137(1), pages 191-209, July.
    5. Perez-Castrillo, David & Wettstein, David, 2005. "Forming efficient networks," Economics Letters, Elsevier, vol. 87(1), pages 83-87, April.
    6. Juan Vidal-Puga, 2003. "A bargaining approach to the consistent value for NTU games with coalition structure," Game Theory and Information 0303001, University Library of Munich, Germany.
    7. Noemí Navarro & Róbert Veszteg, 2008. "Threats and demonstrations of power: experimental results on bilateral bargaining," Working Papers 2008-11, Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center.
    8. Noemí NAVARRO & Róbert VESZTEG, 2007. "Fair ultimatum: an experimental study of the Myerson value," Cahiers de Recherches Economiques du Département d'économie 07.05, Université de Lausanne, Faculté des HEC, Département d’économie.
    9. Matthew O. Jackson, 2003. "A Survey of Models of Network Formation: Stability and Efficiency," Game Theory and Information 0303011, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ander Perez-Orive & Andrea Caggese, 2017. "Capital Misallocation and Secular Stagnation," 2017 Meeting Papers 382, Society for Economic Dynamics.
    2. 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.
    3. Alfredo Valencia-Toledo & Juan Vidal-Puga, 2020. "A sequential bargaining protocol for land rental arrangements," Review of Economic Design, Springer;Society for Economic Design, vol. 24(1), pages 65-99, June.
    4. Juan Vidal-Puga, 2005. "Implementation of the Levels Structure Value," Annals of Operations Research, Springer, vol. 137(1), pages 191-209, July.
    5. Inés Macho-Stadler & David Pérez-Castrillo & David Wettstein, 2017. "Extensions of the Shapley value for Environments with Externalities," Working Papers 1002, Barcelona School of Economics.
    6. Chessa, Michela & Hanaki, Nobuyuki & Lardon, Aymeric & Yamada, Takashi, 2023. "An experiment on the Nash program: A comparison of two strategic mechanisms implementing the Shapley value," Games and Economic Behavior, Elsevier, vol. 141(C), pages 88-104.
    7. Roberto Serrano, 2005. "Fifty years of the Nash program, 1953-2003," Investigaciones Economicas, Fundación SEPI, vol. 29(2), pages 219-258, May.
    8. Roberto Serrano, 2007. "Cooperative Games: Core and Shapley Value," Working Papers wp2007_0709, CEMFI.
    9. Chessa, Michela & Hanaki, Nobuyuki & Lardon, Aymeric & Yamada, Takashi, 2022. "The effect of choosing a proposer through a bidding procedure in implementing the Shapley value," Journal of Economic Psychology, Elsevier, vol. 93(C).
    10. Michela Chessa & Nobuyuki Hanaki & Aymeric Lardon & Takashi Yamada, 2023. "An Experiment on Demand Commitment Bargaining," Dynamic Games and Applications, Springer, vol. 13(2), pages 589-609, June.
    11. Pin, Paolo, 2011. "Eight degrees of separation," Research in Economics, Elsevier, vol. 65(3), pages 259-270, September.
    12. Perez-Castrillo, David & Wettstein, David, 2001. "Bidding for the Surplus : A Non-cooperative Approach to the Shapley Value," Journal of Economic Theory, Elsevier, vol. 100(2), pages 274-294, October.
    13. Juan Vidal-Puga, 2003. "A bargaining approach to the consistent value for NTU games with coalition structure," Game Theory and Information 0303001, University Library of Munich, Germany.
    14. Calvo-Armengol, Antoni, 2001. "Bargaining power in communication networks," Mathematical Social Sciences, Elsevier, vol. 41(1), pages 69-87, January.
    15. Niharika Kakoty & Surajit Borkotokey & Rajnish Kumar & Abhijit Bora, 2024. "Weighted Myerson value for Network games," Papers 2402.11464, arXiv.org.
    16. Sun, Chaoran, 2022. "Bidding against a Buyout: Implementing the Shapley value and the equal surplus value," Journal of Mathematical Economics, Elsevier, vol. 101(C).
    17. Van Essen, Matt & Wooders, John, 2021. "Allocating positions fairly: Auctions and Shapley value," Journal of Economic Theory, Elsevier, vol. 196(C).
    18. Michela Chessa & Nobuyuki Hanaki & Aymeric Lardon & Takashi Yamada, 2021. "An Experiment on the Nash Program: Comparing two Mechanisms Implementing the Shapley Value," GREDEG Working Papers 2021-07, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    19. Slikker, Marco, 2007. "Bidding for surplus in network allocation problems," Journal of Economic Theory, Elsevier, vol. 137(1), pages 493-511, November.
    20. Emililo Calvo, 2004. "Single NTU-value solutions," Game Theory and Information 0405004, University Library of Munich, Germany, revised 10 Jun 2004.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cte:werepe:we016121. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ana Poveda (email available below). General contact details of provider: http://www.eco.uc3m.es/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.