This paper presents a hybrid equilibrium notion that blends together the ’cooperative’ and the ’noncooperative’ theories of competition. In particular, the notion of the bargaining set, originally proposed by Mas-Colell, has been modified in order to accommodate the features of strategic market games. In other words, allocations, objections and counterobjections of the standard bargaining set t...

A broad class of 2-person threat games for which a unique pure strategy Nash bargaining solution exists is characterized in terms of three, simple, empirically meaningful restrictions on the joint objective function: compact domain, continuity, and "corner concavity." Connectedness [in particular, convexity] of the strategy and payoff sets is not required. In addition, conditions are given for ...

Strategic or noncooperative bargaining theory provides potentially fruitful microfoundations for the analysis of exchanges in which both sides enjoy pricesetting power. As Rubinstein (1980) demonstrated in his pioneering contribution, invoking a plausible refinement of Cournot-Nash equilibrium makes it possible to derive unique and often intuitively compelling outcomes from given specifications...

A stationary variant of the repeated prisoners’ dilemma in which the game frontier is a parallelogram is analyzed. By using the probabilistic cheap talk concept of [3], the discount factor becomes fungible, and for a critical value of the discount factor a unique Pareto-optimal and Pareto-dominant solution can be found. The relative bargaining power of the players can be quantified in terms of ...

The 8-th problem raised by [Hart, S., Mas-Colell, A., 2010. Bargaining and cooperation in strategic form games. Journal of the European Economics Association 8 (1), 7–33], is solved. To be specific, I show that the set of SP equilibria can be determined by a finite number of systems of linear inequalities, which are efficiently solvable when there are two players. This is more or less surprisin...

This paper extends the Baron-Ferejohn model of legislative bargaining to general weighted majority games with two modifications: first, payoff division can only be agreed upon after the coalition has formed (two-stage bargaining); second, negotiations in the coalition can break down, in which case a new coalition may be formed (reversible coalitions). Under the most natural bargaining protocol,...

We propose a new model of legislative bargaining in which coalitions may have different values, reflecting the fact that policies they can pursue are constrained by identity coalition members. As delay between offers goes to zero, equilibrium allocation converges generalized version Nash solution which—in contrast standard solution—the winning is endogenous and determined relative coalitional v...

Search models of monetary exchange have typically relied on Nash (1950) bargaining, or strategic games that yield an equivalent outcome, to determine the terms of trade. By considering alternative axiomatic bargaining solutions in a simple search model with divisible money, we show how this choice matters for important results such as the ability of the optimal monetary policy to generate an ef...

The acquisition of information prior to sale gives rise to a hold-up situation quite naturally. Yet, while the bulk of the literature on the hold-up problem considers negotiations under symmetric information where cooperative short-cuts such as split the di¤erence capture the outcome of bargaining, in the present setting, parties negotiate under asymmetric information where the outcome must be ...

We consider here pure bargaining problems endowed with a coalition structure such that each union is given its own utility. In this context we use the Shapley rule in order to assess the main options available to the agents: individual behavior, cooperative behavior, isolated unions behavior, and bargaining unions behavior. The latter two respectively recall the treatment given by Aumann–Drèze ...