SFB 303 Discussion Paper No. B-191

Author: Selten, Reinhard
Title: A Demand Commitment Model of Coalition Bargaining
Abstract: A non-cooperative model of coalition bargaining in the context of characteristic functions with side-payments is introduced. Temporary commitments to payoff demands are a salient feature of the model. For every coalition game, the model generates a finite extensive game with perfect information. For two basic cases - unanimity games and 3-person quota games without the grand coalition - the non-cooperative analysis yields results akin to cooperative game theory. The analysis is based on subgame perfectness alone without the use of further selection criteria. The equal payoff division is the only subgame perfect equilibrium outcome in the case of the zero-normalized unanimity game. In the case of the 3-person quota game without the grand coalition, the players receive their quotas in 2-person coalitions, if a subgame perfect equilibrium is played; each of the three 2-person coaltions occurs with probability 1/3.
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Creation-Date: Juli 1991
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