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Efficiency Does Not Imply Immediate Agreement

Author

Listed:
  • Sergiu Hart

    (The Hebrew University of Jerusalem)

  • Zohar Levy

    (The Hebrew University of Jerusalem)

Abstract

Gul (Econometrica, 1989) introduces a non-cooperative bargaining procedure and claims that the payoffs of the resulting efficient stationary subgame perfect equilibria are close to the Shapley value of the underlying transferable utility game (when the discount factor is close to 1). We exhibit here an example showing that efficiency, even for strictly super-additive games, does not imply that all meetings end in agreement. Thus efficiency does not suffice to get Gul's result.

Suggested Citation

  • Sergiu Hart & Zohar Levy, 1997. "Efficiency Does Not Imply Immediate Agreement," Game Theory and Information 9709001, EconWPA.
  • Handle: RePEc:wpa:wuwpga:9709001 Note: Type of Document - Scientific Word 2.5 (LaTeX). See also:
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    References listed on IDEAS

    as
    1. Hart, Oliver & Moore, John, 1990. "Property Rights and the Nature of the Firm," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1119-1158, December.
    2. Gul, Faruk, 1989. "Bargaining Foundations of Shapley Value," Econometrica, Econometric Society, vol. 57(1), pages 81-95, January.
    3. Winter, Eyal, 1994. "The Demand Commitment Bargaining and Snowballing Cooperation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), pages 255-273.
    4. Manuel García-Goñi & Pere Ibern & José Inoriza, 2009. "Hybrid risk adjustment for pharmaceutical benefits," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), pages 299-308.
    5. Hart, Sergiu & Mas-Colell, Andreu, 1996. "Bargaining and Value," Econometrica, Econometric Society, vol. 64(2), pages 357-380, March.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Roberto Serrano, 2005. "Fifty years of the Nash program, 1953-2003," Investigaciones Economicas, Fundación SEPI, vol. 29(2), pages 219-258, May.
    2. Perez-Castrillo, David & Wettstein, David, 2001. "Bidding for the Surplus : A Non-cooperative Approach to the Shapley Value," Journal of Economic Theory, Elsevier, pages 274-294.
    3. Inés Macho-Stadler & David Pérez-Castrillo & David Wettstein, 2017. "Extensions of the Shapley value for Environments with Externalities," Working Papers 1002, Barcelona Graduate School of Economics.
    4. Joosung Lee, 2013. "Bargaining and Buyout," 2013 Papers ple701, Job Market Papers.

    More about this item

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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