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Bargaining and Power

Author

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  • Dominik Karos

    (Department of Economics and Statistics, Saarland University)

Abstract

Given a simple game, a power configuration specifies the power of each player in each winning coalition. We introduce a new power configuration which takes into account bargaining among players in coalitions. We show that under very weak conditions on a bargaining solution there is a power configuration which is stable with respect to renegotiations. We further show that given this power configuration there is a coalition which is both internally and Nash stable. We consider two different bargaining solutions on apex games and show under which conditions there are core stable coalitions. Finally, we investigate how infeasible coalition might affect the outcome and apply our model to the German parliament.

Suggested Citation

  • Dominik Karos, 2013. "Bargaining and Power," Working Papers 2013.63, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2013.63
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    References listed on IDEAS

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    1. Dutta, Bhaskar & Ehlers, Lars & Kar, Anirban, 2010. "Externalities, potential, value and consistency," Journal of Economic Theory, Elsevier, vol. 145(6), pages 2380-2411, November.
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    3. Kalai, Ehud, 1977. "Proportional Solutions to Bargaining Situations: Interpersonal Utility Comparisons," Econometrica, Econometric Society, vol. 45(7), pages 1623-1630, October.
    4. Dinko Dimitrov & Claus-Jochen Haake, 2006. "Government versus Opposition: Who Should be Who in the 16th German Bundestag?," Journal of Economics, Springer, vol. 89(2), pages 115-128, November.
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    6. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
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    8. Bogomolnaia, Anna & Jackson, Matthew O., 2002. "The Stability of Hedonic Coalition Structures," Games and Economic Behavior, Elsevier, vol. 38(2), pages 201-230, February.
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    10. Dreze, J H & Greenberg, J, 1980. "Hedonic Coalitions: Optimality and Stability," Econometrica, Econometric Society, vol. 48(4), pages 987-1003, May.
    11. Dominik Karos, 2012. "Coalition Formation in Generalized Apex Games," Working Papers 2012.38, Fondazione Eni Enrico Mattei.
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    Cited by:

    1. Dominik Karos, 2016. "Stable partitions for games with non-transferable utility and externalities," International Journal of Game Theory, Springer;Game Theory Society, vol. 45(4), pages 817-838, November.
    2. Dominik Karos, 2015. "Stable partitions for games with non-transferable utilities and externalities," Economics Series Working Papers 741, University of Oxford, Department of Economics.
    3. Dominik Karos, 2016. "A note on monotonic power indices, smaller coalitions, and new members," Theory and Decision, Springer, vol. 81(1), pages 89-100, June.

    More about this item

    Keywords

    Coalition Formation; Power; Bargaining;

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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