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On the Neutrality of Coalition Formation in a Pure Bargaining Problem

Author

Listed:
  • Haruo Imai

    (Institute of Economic Research, Kyoto University)

  • Naoki Watanabe

    (Institute of Economic Research, Kyoto University)

Abstract

We show the nuetrality of coalition formation in the sequential bargaining game a la Stahl-Binmore-Rubinstein with random proposers. To that end, we juxtapose an ex-ante coalition formation stage to their bargaining game. Based on the expected outcomes in the negotiation over how to split a dollar, players can form coalitions in a sequential manner, within each of which they can redistribute their payoffs. We find that the grand coalition forms, and that each player receives his discounted expected payoff that is obtained by playing as a single player in the negotiation. In this sense, the neutrality holds in terms of payoffs, although there could be many equilibria in the bargaining stage. We also examine the neutrality from other criteria.

Suggested Citation

  • Haruo Imai & Naoki Watanabe, 2004. "On the Neutrality of Coalition Formation in a Pure Bargaining Problem," KIER Working Papers 600, Kyoto University, Institute of Economic Research.
    • Handle: RePEc:kyo:wpaper:600
    as

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    References listed on IDEAS

    as
    1. Suchan Chae & Hervé Moulin, 2010. "Bargaining among groups: an axiomatic viewpoint," International Journal of Game Theory, Springer;Game Theory Society, vol. 39(1), pages 71-88, March.
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    More about this item

    Keywords

    sequential bargaining game; coalition formation; coalitional contract; strategic; payoff; coalitional neutrality;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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