SFB 303 Discussion Paper No. B-154

Author: Moldovanu, Benny
Title: Sequential Bargaining, Cooperative Games, and Coalition-Proofness
Abstract: The aim of this paper is to establish several links between two seemingly different game-theoretic approaches to the problem of coalition formation and payoff division. The two approaches are the so called "cooperative" and "noncooperative", and the links are created at the levels of the modelling, the solution concept and the results. We study a noncooperative, sequential bargaining game based on a game in characteristic function form without side payments, and relate payoffs in coalition-proof Nash equilibria of the extensive form game with special allocations which may be in the core of the underlying game or may display some consistency with regard to outside options. Balancedness (in the sense of Scarf) plays an important role. Three-person games are fully analyzed, and we discuss possible generalizations.
Creation-Date: June 1990
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