This paper proposes a new solution concept to three-player coalitional bargaining problems where the underlying economic opportunities are described by a partition function. This classic bargaining problem is modeled as a dynamic non-cooperative game in which players make conditional or unconditional offers, and coalitions continue to negotiate as long as there are gains from trade. The theory ...

This paper proposes a new solution concept to three-player coalitional bargaining problems where the underlying economic opportunities are described by a partition function. This classic bargaining problem is modeled as a dynamic non-cooperative game in which players make conditional or unconditional o¤ers, and coalitions continue to negotiate as long as there are gains from trade. The theory y...

I study a noncooperative multilateral bargaining game of coalition formation, based on underlying TU games in partition form, in which coalitions are allowed to renegotiate agreements. Special attention is devoted to the strategic considerations induced by the possibility of renegotiation and its consequences for the efficiency of bargaining. I deÞne a class of games, relative positive and rela...

1. Definitions 2 1.1. Non-cooperative Games 2 1.2. Cooperative 2-person Games 4 1.3. Cooperative n-person Games (in coalitional form) 6 2. Theorems and Main Ideas 7 3. Techniques 8 3.1. Tips to remember when solving 2-player 0-sum games: 8 3.2. Solving for mixed strategies in 2-player 0-sum games: 8 3.3. Finding equilibrium pairs in 2-person nonzero-sum games 9 3.4. Finding the Nash maximin bar...

The mechanism by Hart and Mas-Colell (1996) for non-transferable utility (NTU) games is generalized so that a coalition structure among players is taken into account. The new mechanism yields the Owen value for transferable utility (TU) games with coalition structure as well as the consistent value (Maschler and Owen 1989, 1992) for NTU games with trivial coalition structure. Furthermore, we ob...

In this paper, we apply bargaining theory to a certain model of coalition formation. The notions of a feasible government and a stable government are central in the model considered. By a government, we mean a pair consisting of a majority coalition and a policy supported by this coalition. The aim of this paper is to establish which stable government should be created if more than one stable g...

We consider an extension of strategic normal form games with a phase before the actual play of the game, where players can make binding offers for transfer of utilities to other players after the play of the game, contingent on the recipient playing the strategy indicated in the offer. Such offers transform the payoff matrix of the original game but preserve its non-cooperative nature. The type...

Experiments with the ultimatum game—where one party can make a take-it-or-leave-it offer to a second party on how to split a pie—illustrate that conventional game theory has been wrong in its predictions regarding the simplest of bargaining settings: Even when one party has enormous bargaining power, she may be able to extract all the surplus from trade, because the second party will reject gro...