EXTENDED EDGEWORTH BARGAINING GAMES AND COMPETITIVE EQUILIBRIUM***

Competitive bargaining equilibrium

We propose a simple bargaining procedure, the equilibrium of which converges to the Walrasian allocation as the agents become increasingly patient. We thus establish that the competitive outcome obtains even if agents have market power and are not price-takers. Moreover, where in other bargaining protocols the final outcome depends on bargaining power or relative impatience, the outcome here is...

Equilibrium Behavior in Crisis Bargaining Games

Search theory, competitive equilibrium, and the Nash bargaining solution

We investigate a canonical search theoretic model of a society, à la Burdett and Wright (1998), in which two agents are randomly matched, facing a pair of nontransferable payoffs drawn randomly from a compact convex set, and choose whether or not to agree to form a partnership, which is formed if and only if both of them agree to do so, subject to a small probability of exogenous break down. As...

Bargaining, Reputation and Equilibrium Selection in Repeated Games with Contracts1

Consider a two-person intertemporal bargaining problem in which players choose actions and o¤ers each period and collect payo¤s (as function of that period’s actions) while bargaining proceeds. This can alternatively be viewed as an in…nitely-repeated game wherein players can o¤er one another enforceable contracts that govern play for the rest of the game. Theory is silent regarding how the sur...

Bargaining, Reputation and Equilibrium Selection in Repeated Games

By arriving at self-enforcing agreements, agents in an ongoing strategic situation create surplus that benefits them both. Little is known about how that surplus will be divided. This project concerns the role of reputation formation in such environments. It studies a model in which players entertain the slight possibility that their opponents may be one of a variety of behavioral types. When p...