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SSRN Electronic Journal
Article . 2012 . Peer-reviewed
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On the Convergence to the Nash Bargaining Solution for Endogenous Bargaining Protocols

Authors: Herings P. Jean-Jacques; Britz Volker; Predtetchinski Arkadi;

On the Convergence to the Nash Bargaining Solution for Endogenous Bargaining Protocols

Abstract

We consider non-cooperative multilateral bargaining games with endogenous bargaining protocols. Under an endogenous protocol, the probability with which a player becomes the proposer in a round of bargaining depends on the identity of the player who previously rejected. An important example is the frequently studied rejector-becomes-proposer protocol. We focus on subgame perfect equilibria in stationary strategies which are shown to exist and to be efficient. Equilibrium proposals do not depend on the probability to propose conditional on the rejection by another player, though equilibrium acceptance sets do depend on these probabilities. Next we consider the limit, as the bargaining friction vanishes. In case no player has a positive probability to propose conditional on his rejection, each player receives his utopia payoff conditional on being recognized and equilibrium payoffs are in general Pareto inefficient. Otherwise, equilibrium proposals of all players converge to a weighted Nash Bargaining Solution, where the weights are determined by the probability to propose conditional on a rejection.

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Netherlands
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Keywords

microeconomics ;

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
2
Average
Average
Average
bronze