This paper develops the concept of contractual equilibrium for repeated games with transferable utility, whereby the players negotiate cooperatively over their continuation strategies at the start of each period. Players may disagree in the negotiation phase, and continuation play may be suboptimal under disagreement. Under agreement, play is jointly optimal in the continuation game, and the pl...

We show that the Aumann-Davis-Maschler bargaining set and the Mas-Colell bargaining set of a non-leveled NTU game that is either ordinal convex or coalition merge convex coincides with the core of the game. Moreover, we show by means of an example that the foregoing statement may not be valid if the NTU game is marginal convex.

The issue of power in distribution channels remains a topic of interest among both practitioners and researchers of marketing. This interest has, no doubt, been fueled by the growing power of retailers and the emergence of retail powerhouses such as Walmart. Power, in a distribution channels context, is often de…ned as the ability to appropriate a larger share of the total channel surplus. In a...

In this paper we view bargaining and cooperation as an interaction superimposed on a game in strategic form. A multistage bargaining procedure for N players, the “proposer commitment” procedure, is presented. It is inspired by Nash’s two-player variable-threat model; a key feature is the commitment to “threats.” We establish links to classical cooperative game theory solutions, such as the Shap...

This paper studies a decentralized, dynamic matching and bargaining market: buyers and sellers are matched into pairs. Traders exit the market at a constant rate, inducing search costs (frictions). All price o¤ers are made by sellers. Despite the fact that sellers have all the bargaining power we show that they set competitive prices in the limit when frictions become small. Previous literature...

This paper proposes a continuous-time model framework of bargaining, which is analytically tractable even in complex situations like coalitional bargaining. The main ingredients of the model are: (i) players get to make offers according to a random arrival process; (ii) there is a deadline that ends negotiations. In the case of n-player group bargaining, there is a unique subgame-perfect Nash e...

Backward induction is a widely accepted principle for predicting behavior in sequential games. In the classic example of the “centipede game,” however, players frequently violate this principle. An alternative is a “dynamic level-k” model, where players choose a rule from a rule hierarchy. The rule hierarchy is iteratively defined such that the level-k rule is a best response to the level-(k-1)...

Abstract Ken Binmore’s (1994, 1998) treatment of his Game Life as a bargaining game and morality an equilibrium selection device for that game, are examined in the context repeated games with both infinite finite horizon. With horizon, there three different viable approaches. They differ way they impact morality.

is paper proposes a new approach to the problem of equilibrium selection in repeated games with transfers, by supposing that in each period the players bargain over how to play. Although the bargaining phase is cheap talk (which follows a generalized alternating-offer protocol), sharp predictions arise from three axioms. Two axioms allow the players to meaningfully discuss whether to deviate f...

This paper deals with the complexity of cooperative solution concepts, notably, the bargaining set and the kernel, for coalitional games in compact form. In [4], Deng and Papadimitriou have left open a number of issues regarding those concepts which this paper provides a thorough answer to. Open issues (and correspondent answers we provide) are as follows. Given a graph game G and an imputation...