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Altruism, Spite and Competition in Bargaining Games

Author

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  • Maria Montero

    (University of Nottingham)

Abstract

This paper shows that altruism may be beneficial in bargaining when there is competition for bargaining partners. In a game with random proposers, the most altruistic player has the highest material payoff if players are sufficiently patient. However, this advantage is eroded as the discount factor increases, and if players are perfectly patient altruism and spite become irrelevant for material payoffs.

Suggested Citation

  • Maria Montero, 2005. "Altruism, Spite and Competition in Bargaining Games," Game Theory and Information 0512004, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpga:0512004
    Note: Type of Document - pdf; pages: 21
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    References listed on IDEAS

    as
    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. Gary Charness & Matthew Rabin, 2002. "Understanding Social Preferences with Simple Tests," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 817-869.
    3. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 817-868.
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    5. David K. Levine, 1998. "Modeling Altruism and Spitefulness in Experiment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(3), pages 593-622, July.
    6. Maria Montero, 2007. "Inequity Aversion May Increase Inequity," Economic Journal, Royal Economic Society, vol. 117(519), pages 192-204, March.
    7. repec:ebl:ecbull:v:3:y:2005:i:43:p:1-5 is not listed on IDEAS
    8. Bester, Helmut & Guth, Werner, 1998. "Is altruism evolutionarily stable?," Journal of Economic Behavior & Organization, Elsevier, vol. 34(2), pages 193-209, February.
    9. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    10. Kalyan Chatterjee & Bhaskar Dutia & Debraj Ray & Kunal Sengupta, 2013. "A Noncooperative Theory of Coalitional Bargaining," World Scientific Book Chapters,in: Bargaining in the Shadow of the Market Selected Papers on Bilateral and Multilateral Bargaining, chapter 5, pages 97-111 World Scientific Publishing Co. Pte. Ltd..
    11. Tomohiko Kawamori, 2005. "Players' Patience and Equilibrium Payoffs in the Baron-Ferejohn Model," Economics Bulletin, AccessEcon, vol. 3(43), pages 1-5.
    12. Possajennikov, Alex, 2000. "On the evolutionary stability of altruistic and spiteful preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 42(1), pages 125-129, May.
    13. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
    14. Okada, Akira, 1996. "A Noncooperative Coalitional Bargaining Game with Random Proposers," Games and Economic Behavior, Elsevier, vol. 16(1), pages 97-108, September.
    15. Norman, Peter, 2002. "Legislative Bargaining and Coalition Formation," Journal of Economic Theory, Elsevier, vol. 102(2), pages 322-353, February.
    16. John Sutton, 1986. "Non-Cooperative Bargaining Theory: An Introduction," Review of Economic Studies, Oxford University Press, vol. 53(5), pages 709-724.
    17. Harrington, Joseph E, Jr, 1990. "The Role of Risk Preferences in Bargaining When Acceptance of a Proposal Requires Less than Unanimous Approval," Journal of Risk and Uncertainty, Springer, vol. 3(2), pages 135-154, June.
    18. Fehr, Ernst & Schmidt, Klaus M., 2001. "Theories of Fairness and Reciprocity," Discussion Papers in Economics 14, University of Munich, Department of Economics.
    19. Possajennikov, Alex, 2001. "Equilibrium selection in a merger game," Economics Letters, Elsevier, vol. 72(2), pages 255-261, August.
    20. Maria Montero, 2005. "Inequity Aversion May Increase Inequity in Majoritarian Bargaining," Game Theory and Information 0505007, University Library of Munich, Germany.
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    Citations

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    Cited by:

    1. Kohler, Stefan, 2013. "Inequality aversion causes equal or unequal division in alternating-offer bargaining," MPRA Paper 40764, University Library of Munich, Germany.
    2. Stefan Kohler, 2014. "Guilt causes equal or unequal division in alternating-offer bargaining," Economics Bulletin, AccessEcon, vol. 34(3), pages 1611-1617.
    3. Cardona, Daniel & Rubí-Barceló, Antoni, 2014. "Investments and bargaining in a model with positive consumption externalities," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 78-93.
    4. Jay Simon, 2016. "On the existence of altruistic value and utility functions," Theory and Decision, Springer, vol. 81(3), pages 371-391, September.
    5. Kohler, Stefan, 2012. "Envy can promote more equal division in alternating-offer bargaining," MPRA Paper 40761, University Library of Munich, Germany.

    More about this item

    Keywords

    altruism; spite; bargaining; competition; coalition formation;

    JEL classification:

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

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