Sequential share bargaining

Sequential share bargaining

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Article ID: iaor20123806
Volume: 41
Issue: 2
Start Page Number: 301
End Page Number: 323
Publication Date: May 2012
Journal: International Journal of Game Theory
Authors: ,
Keywords: bargaining, sequential analysis, voting
Abstract:

This paper presents a new extension of the Rubinstein‐Ståhl bargaining model to the case with n players, called sequential share bargaining. The bargaining protocol is natural and has as its main feature that the players’ shares in the surplus are determined sequentially rather than simultaneously. The protocol also assumes orderly voting, a restriction on the order in which players respond to a proposal. The bargaining protocol requires unanimous agreement for proposals to be implemented. Unlike all existing bargaining protocols with unanimous agreement, the resulting game has unique subgame perfect equilibrium utilities for any value of the discount factor. The result builds on the analysis of so‐called one‐dimensional bargaining problems. We show that also one‐dimensional bargaining problems have unique subgame perfect equilibrium utilities for any value of the discount factor.

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