Stochastic uncertainty can cause coordination problems that may hinder mutually beneficial cooperation. We propose a mechanism of ex-post voluntary transfers designed to circumvent these and ask whether it increase efficiency. To test this transfer mechanism, we implement controlled laboratory experiment based on repeated Ultimatum Game with stochastic endowment. Contrary our hypothesis, find a...

We develop a two-person negotiation model with complete information that makes endogenous both the deadline and the level of surplus destruction after the deadline. We show that the undominated Nash equilibrium outcome is always unique but might be inefficient. Moreover, as the bargaining period becomes short or as the players become very patient, the unique undominated Nash equilibrium outcome...

Given n agents with who wish to divide m commodities, consider the n-person noncooperative game with strategies consisting of concave increasing utility functions, and whose outcomes are the relative utilitarian solution. Any constrained equal-income competitive equilibrium allocation for the true utilities is shown to ba a Nash equilibrium outcome for the noncooperative game. Conditions are pr...

We present a classification of all stationary subgame perfect equilibria of the random proposer model for a three-person cooperative game according to the level of efficiency. The efficiency level is characterized by the number of “central” players who join all equilibrium coalitions. The existence of a central player guarantees asymptotic efficiency. The marginal contributions of players to th...

Howard (1992) argues that the Nash bargaining solution is not Nash implementable, as it does not satisfy Maskin monotonicity. His arguments can be extended to other bargaining solutions as well. However, by defining a social choice correspondence that is based on the solution rather than on its realizations, one can overcome this shortcoming. We even show that such correspondences satisfy a str...

We reconsider the class of weighted Kalai-Smorodinsky solutions of Dubra (2001), and using methods of Imai (1983), extend their characterization to the domain of multilateral bargaining problems. Aside from standard axioms in the literature, this result involves a new property that weakens the axiom Bilateral Consistency (Lensberg, 1988), by making the notion of consistency dependent on how ide...

This paper considers equilibrium in transaction mechanisms. In an environment with homogeneous buyers and sellers, which eliminates the advantage auctions possess of matching buyers and sellers, both auctions and bargaining are equilibria. However, only auctions are evolutionarily stable. This identifies a new advantage of auctions over bargaining, arising from the division of the gains from tr...

We provide three alternative characterizations of the proportional solution defined on compact and comprehensive bargaining problems with claims that are not necessarily convex. One characterization result is obtained by using, together with other standard axioms, two solidarity axioms. Another characterization theorem shows that the single-valuedness axiom is dispensable even within the class ...

Thomas C. Schelling’s most influential contributions include focal points in coordination games, commitment and credible threats in bargaining, the theory of social dilemmas, and anticipatory selfcommand in intertemporal choice. His spatial proximity models are early prototypes of cellular automata. Contributions to this special issue were inspired by a few of these theoretical ideas. 2006 Else...

We study the long-run sustainability of reputations in games with imperfect public monitoring. It is impossible to maintain a permanent reputation for playing a strategy that does not eventually play an equilibrium of the game without uncertainty about types. Thus, a player cannot indefinitely sustain a reputation for non-credible behavior in the presence of imperfect monitoring. Journal of Eco...