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Subgame-perfect implementation of bargaining solutions

Miyagawa, Eiichi

This paper provides simple four-stage game forms that fully implement a large class of two-person bargaining solutions in subgame-perfect equilibrium. The solutions that can be implemented by our game forms are those that maximize a monotonic and quasi-concave function of utilities after normalizing each agent's utility function so that the maximum utility is 1 and the utility of the disagreement outcome is 0. This class of solutions includes the Nash, Kalai, Smorodinsky, and Relative Utilitarian solutions. The game forms have a structure of alternating offers and contain no integer device.

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Academic Units
Economics
Publisher
Department of Economics, Columbia University
Series
Department of Economics Discussion Papers, 0102-16
Published Here
March 22, 2011

Notes

March 2002