Two-Stage Bargaining with Reversible Coalitions: the Case of Apex Games
This paper studies coalition formation and payoff division in a class of majority games (apex games) assuming that payoff division can only be agreed upon after forming the coalition (two-stage bargaining) and that negotiations in the coalition can break down and a new coalition be formed (reversible coalitions). In contrast with the results of other two-stage models, all minimal winning coalitions may form and expected payoffs coincide with the per capita nucleolus. These results are robust to small changes in the bargaining procedure. Surprisingly, having a two-stage process (rather than a one-stage process with simultaneous coalition formation and payoff division) benefits the apex player.
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- Okada, Akira, 1996. "A Noncooperative Coalitional Bargaining Game with Random Proposers," Games and Economic Behavior, Elsevier, vol. 16(1), pages 97-108, September.
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- Montero, M.P., 2001. "The Nucleolus as a Consistent Power Index in Noncooerative Majority Games," Discussion Paper 2001-39, Tilburg University, Center for Economic Research.
- Slikker, M., 2000. "Decision making and cooperation restrictions," Other publications TiSEM 61eead41-85c7-4ded-81c4-e, Tilburg University, School of Economics and Management.
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