Dynamic matching and bargaining games provide models of decentralized trading with frictions. A central objective of the literature is to investigate how equilibrium outcomes depend on the level of the frictions. In particular, will the outcome become e¢ cient when frictions become small? Existing speci…cations of such games give di¤erent answers. To investigate what causes these di¤erence we i...

We propose a bargaining process with alternating proposals as a way of solving non-cooperative games, giving rise to Pareto efficient agreements which will, in general, differ from the Nash equilibrium of the constituent games. JEL classification: C72; C73; C78.

This paper explores the relationships between noncooperative bargaining games and the consistent value for non-transferable utility (NTU) cooperative games. A dynamic approach to the consistent value for NTU games is introduced: the consistent vector field. The main contribution of the paper is to show that the consistent field is intimately related to the concept of subgame perfection for fini...

I consider an alternating offer bargaining game which is played by a risk neutral buyer and seller, where the value of the good to be traded follows a Markov process. For these games the existence of a perfect equilibrium is proved and the set of equilibrium payoffs and strategies are characterised. The main results are: (a) If the buyer is less patient than the seller, then there will be delay...

What endogenous factors contribute to minority (Red Queen) or majority King) domination under conditions of coercive bargaining? We build on previous work demonstrating disadvantage in non-coercive bargaining games show that neutral initial conditions, majorities are advantaged high conflict situations, and minorities low games. These effects a function the relationship between (1) relative pro...

We study bilateral bargaining problems with an interested third party, the stakeholder, that enjoys benefits upon a bilateral agreement. To address the strategic implications of stakeholders over negotiations, we consider a model where two bargainers interact in the presence of a third party that (a) can transfer a share of her benefits to the bargainers but cannot receive a share of the bilate...

A new bargaining set based on notions of both internal and external stability is developed in the context of endogenous coalition formation. It allows to make an explicit distinction between withingroup and outside-group deviation options. This type of distinction is not present in current bargaining sets. For the class of monotonic proper simple games, the outcomes in the bargaining set are ch...

The paper investigates the reactive bargaining set, a solution con­ cept for TU-games introduced by Granot (1994), in economies in which agents exchange indivisible goods and one perfectly divisible good (money). Under the assumptions that the preferences of the agents are quasi-linear and the initial endowments satisfy the Total Abundance condition, which is an abundance con­ dition on the mon...

In their article “Explaining Bargaining Impasse: The Role of Self-Serving Biases”, (JEP, Winter 1997), Babcock and Loewenstein (hereafter BL) invoke the notion of selfserving biases to account for behavior in a rich variety of settings, for instance, the failure to reach an agreement in laboratory bargaining games, the behavior of job searchers, and the discrepancy between plaintiffs’ and defen...