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Bargaining and Power

  • Dominik Karos

    (Department of Economics and Statistics, Saarland University)

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.

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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2013.63.

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Date of creation: Jun 2013
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Handle: RePEc:fem:femwpa:2013.63
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  1. Dinko Dimitrov & Claus-Jochen Haake, 2008. "A note on the paradox of smaller coalitions," Social Choice and Welfare, Springer, vol. 30(4), pages 571-579, May.
  2. Ehud Kalai, 1977. "Proportional Solutions to Bargaining Situations: Interpersonal Utility Comparisons," Discussion Papers 179, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  3. Bhaskar Dutta & Lars Ehlers & Anirban Kar, 2008. "Externalities, Potential, Value And Consistency," Working papers 168, Centre for Development Economics, Delhi School of Economics.
  4. Hart, Sergiu & Kurz, Mordecai, 1983. "Endogenous Formation of Coalitions," Econometrica, Econometric Society, vol. 51(4), pages 1047-64, July.
  5. Geoffroy de Clippel & Roberto Serrano, 2005. "Marginal Contributions and Externalities in the Value," Working Papers 2005-11, Brown University, Department of Economics.
  6. Dimitrov, Dinko & Haake, Claus-Jochen, 2008. "Stable governments and the semistrict core," Games and Economic Behavior, Elsevier, vol. 62(2), pages 460-475, March.
  7. Milchtaich, Igal & Winter, Eyal, 2002. "Stability and Segregation in Group Formation," Games and Economic Behavior, Elsevier, vol. 38(2), pages 318-346, February.
  8. Chun, Y. & Thomson, W., 1989. "Bargaining Problems With Claims," RCER Working Papers 189, University of Rochester - Center for Economic Research (RCER).
  9. 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.
  10. Dominik Karos, 2012. "Coalition Formation in Generalized Apex Games," Working Papers 2012.38, Fondazione Eni Enrico Mattei.
  11. Aumann, Robert J. & Maschler, Michael, 1985. "Game theoretic analysis of a bankruptcy problem from the Talmud," Journal of Economic Theory, Elsevier, vol. 36(2), pages 195-213, August.
  12. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
  13. Bogomolnaia, Anna & Jackson, Matthew O., 2002. "The Stability of Hedonic Coalition Structures," Games and Economic Behavior, Elsevier, vol. 38(2), pages 201-230, February.
  14. Dreze, J H & Greenberg, J, 1980. "Hedonic Coalitions: Optimality and Stability," Econometrica, Econometric Society, vol. 48(4), pages 987-1003, May.
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