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Dominance Solvability of Dynamic Bargaining Games

We formulate and study a general finite-horizon bargaining game with simultaneous moves and a disagreement outcome that need not be the worst possible result for the agents. Conditions are identified under which the game is dominance solvable in the sense that iterative deletion of weakly dominated strategies selects a unique outcome. Our analysis uses a backward induction procedure to pinpoint the latest moment at which a coalition can be found with both an incentive and the authority to force one of the available alternatives. Iterative dominance then implies that the alternative characterized in this way will be agreed upon at the outset - or, if a suitable coalition is never found, that no agreement will be reached.

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Paper provided by Queen Mary University of London, School of Economics and Finance in its series Working Papers with number 644.

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Date of creation: Apr 2009
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Handle: RePEc:qmw:qmwecw:wp644
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  1. John Duggan & Seok-ju Cho, 2007. "Bargaining Foundations of the Median Voter Theorem," Wallis Working Papers WP49, University of Rochester - Wallis Institute of Political Economy.
  2. Sakovics Jozsef, 1993. "Delay in Bargaining Games with Complete Information," Journal of Economic Theory, Elsevier, vol. 59(1), pages 78-95, February.
  3. Banks, Jeffrey S. & Duggan, John, 1999. "A Bargaining Model of Collective Choice," Working Papers 1053, California Institute of Technology, Division of the Humanities and Social Sciences.
  4. Chatterjee, K. & Samuelson, L., 1989. "Perfect Equilibria In Simultaneous- Offers Bargaining," Papers 12-87-3, Pennsylvania State - Department of Economics.
  5. Perry Motty & Reny Philip J., 1993. "A Non-cooperative Bargaining Model with Strategically Timed Offers," Journal of Economic Theory, Elsevier, vol. 59(1), pages 50-77, February.
  6. E. Kohlberg & J.-F. Mertens, 1998. "On the Strategic Stability of Equilibria," Levine's Working Paper Archive 445, David K. Levine.
  7. Gretlein, Rodney, J, 1982. "Dominance Solvable Voting Schemes: A Comment," Econometrica, Econometric Society, vol. 50(2), pages 527-28, March.
  8. Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April.
  9. Marx, Leslie M. & Swinkels, Jeroen M., 1997. "Order Independence for Iterated Weak Dominance," Games and Economic Behavior, Elsevier, vol. 18(2), pages 219-245, February.
  10. Dekel, Eddie, 1989. "Simultaneous Offers and the Inefficiency of Bargaining: A Two-Period Example," Department of Economics, Working Paper Series qt2b0402g4, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  11. John Sutton, 1986. "Non-Cooperative Bargaining Theory: An Introduction," Review of Economic Studies, Oxford University Press, vol. 53(5), pages 709-724.
  12. Anat R. Admati & Motty Perry, 1987. "Strategic Delay in Bargaining," Review of Economic Studies, Oxford University Press, vol. 54(3), pages 345-364.
  13. Ausubel, Lawrence M. & Cramton, Peter & Deneckere, Raymond J., 2002. "Bargaining with incomplete information," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 3, chapter 50, pages 1897-1945 Elsevier.
  14. Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, June.
  15. Kalyan Chatterjee & Bhaskar Dutta & Debraj Ray & Kunal Sengupta, 1993. "A Noncooperative Theory of Coalitional Bargaining," Review of Economic Studies, Oxford University Press, vol. 60(2), pages 463-477.
  16. Ariel Rubinstein, 2010. "Perfect Equilibrium in a Bargaining Model," Levine's Working Paper Archive 661465000000000387, David K. Levine.
  17. Myerson, Roger B, 1979. "Incentive Compatibility and the Bargaining Problem," Econometrica, Econometric Society, vol. 47(1), pages 61-73, January.
  18. Lones Smith & Ennio Stacchetti, 2002. "Aspirational Bargaining," Game Theory and Information 0201003, EconWPA.
  19. Vijay Krishna & Roberto Serrano, 1996. "Multilateral Bargaining," Review of Economic Studies, Oxford University Press, vol. 63(1), pages 61-80.
  20. Muhamet Yildiz, 2003. "Bargaining without a Common Prior-An Immediate Agreement Theorem," Econometrica, Econometric Society, vol. 71(3), pages 793-811, 05.
  21. Moulin, Herve, 1979. "Dominance Solvable Voting Schemes," Econometrica, Econometric Society, vol. 47(6), pages 1137-51, November.
  22. D. Abreu & F. Gul, 1998. "Bargaining and Reputation," Princeton Economic Theory Papers 00s9, Economics Department, Princeton University.
  23. John Sutton, 1986. "Non-Cooperative Bargaining Theory: An Introduction," Review of Economic Studies, Oxford University Press, vol. 53(5), pages 709-724.
  24. Kennan, John & Wilson, Robert, 1993. "Bargaining with Private Information," Journal of Economic Literature, American Economic Association, vol. 31(1), pages 45-104, March.
  25. Muthoo,Abhinay, 1999. "Bargaining Theory with Applications," Cambridge Books, Cambridge University Press, number 9780521576475.
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