GAME THEORY & BARGAINING THEORY eJOURNAL
"Utility Possibility Curve and Bargaining"
HAK CHOI, Chienkuo Technology University - Department of International Business, Chung-Hua Institution for Economic Research
This paper proves that bargaining can be equivalently depicted in a utility possibility curve, to derive the same unfair Nash solution. This paper confirms that there is no simple solution for bargaining, and that the so-called social indifference curve does not exist.
"Payoff Shares in Two-Player Contests"
University of Basel, Faculty of Business and Economics, WWZ Discussion Paper 2014/11
SAMUEL HÄFNER, University of Basel
GEORG NOLDEKE, University of Basel
In contest models with symmetric valuations, equilibrium payoffs are positive shares of the value of the prize. In contrast to a bargaining situation, these shares sum to less than one because a share of the value is lost due to rent-dissipation. We ask: can every such division into payoff shares arise as the outcome of the unique pure-strategy Nash equilibrium of a simple asymmetric contest in which contestants differ in the effectiveness of their efforts? For two-player contests the answer is shown to be positive.
"Assortativity Evolving from Social Dilemmas"
HEINRICH H. NAX, ETH Zurich
ALEXANDROS RIGOS, University of Leicester - Department of Economics
Assortative mechanisms can overcome tragedies of the commons that otherwise result in dilemma situations. Assortativity criteria include genetics (e.g. kin selection), preferences (e.g. homophily), locations (e.g. spatial interaction) and actions (e.g. meritocracy), usually presuming an exogenously fixed matching mechanism. Here, we endogenize the matching process with the aim of investigating how assortativity itself, jointly with cooperation, is driven by evolution. Our main finding is that only full-or-null assortativities turn out to be long-run stable, their relative stabilities depending on the exact incentive structure of the underlying social dilemma. The resulting social loss is evaluated for general classes of dilemma games, thus quantifying to what extent tragedy of the commons may be endogenously overcome.
"The Efficiency of Monopolistic Provision of Public Goods Through Simultaneous Bilateral Bargaining"
ISER Discussion Paper No. 948
NORIAKI MATSUSHIMA, Osaka University - Institute of Social and Economic Research
RYUSUKE SHINOHARA, Department of Economics, Hosei University
We examine a monopolistic supplier's decision about a pure public good when he/she must negotiate with beneficiaries of the good. In our model, while the level of the public good is decided unilaterally by the supplier, the cost share of the public good is negotiated between the supplier and beneficiaries. Our bargaining model is built on simultaneous bilateral bargaining and the bargaining power of the supplier is a key factor for the analysis. We show that under some mild conditions, the supplier produces the public good at a Pareto-efficient level in equilibrium if and only if his/her bargaining power is sufficiently weak. In addition, under some reasonable parametric functions, we show that the equilibrium likelihood of the efficient provision of the public good diminishes as the number of beneficiaries increases. We show by a numerical example that the source of the inefficient provision of the public good when the supplier's bargaining power is sufficiently strong may be the excessive supply of the public good.
"Foreign Entry, Acquisition Target and Host Country Welfare"
The Manchester School, Vol. 83, Issue 6, pp. 725-748, 2015
TARUN KABIRAJ, Indian Statistical Institute, New Delhi - Economic Research Unit
UDAY BHANU SINHA, Indian Statistical Institute
We discuss entry strategy of a foreign multinational into a local market with initially two asymmetric local firms. We show that greenfield investment occurs when both local cost asymmetry and subsidiary set up cost are small, exporting occurs when both trade cost and technology gap are low, otherwise acquisition occurs. Under acquisition equilibrium the less efficient firm is acquired unless the cost of technology transfer is large enough. We focus on the process of selection of the target firm by constructing sequential offer game, bidding game and repeated offer game. However, the MNC's entry always reduces host country welfare.
"The Question of Ownership in a Sharing Economy"
THOMAS A. WEBER, Ecole Polytechnique Federale de Lausanne - MTEI
The sharing of durable goods in a dynamic ownership economy is attractive, since it has the potential to realize gains from trade via short-term transfers of usage rights. We develop a model in which a set of agents, who are heterogeneous in their likely need of a durable good, make purchase decisions and then have the option to participate in a sharing market contingent on a realized need. The agents' purchase decisions are compared to a situation where ex-post sharing is impossible. The impact of sharing on product sales is ambiguous: for low-price products sales may drop, while for high-price products the number of consumers who decide to become owners may actually increase. Our analysis extends to a sharing market in which prices are negotiated bilaterally in a Nash-bargaining framework. The resulting negotiated-sharing equilibrium allows for a realistic supply-demand imbalance in the sharing market.
About this eJournal
This eJournal distributes working and accepted paper abstracts of empirical and theoretical papers on game theory, defined as the study of the strategic interaction among rational agents in competitive and cooperative environments, and bargaining theory, defined as a situation in which two or more players have a common interest to co-operate, but have conflicting interests over exactly how to co-operate. The topics in this eJournal include all of the subjects in Section C7 of the JEL classification system.
Editor: Victor Ricciardi, Goucher College
To submit your research to SSRN, sign in to the SSRN User HeadQuarters, click the My Papers link on left menu and then the Start New Submission button at top of page.
If your organization is interested in increasing readership for its research by starting a Research Paper Series, or sponsoring a Subject Matter eJournal, please email: RPS@SSRN.com
Economics Research Network (ERN), a division of Social Science Electronic Publishing (SSEP) and Social Science Research Network (SSRN)
ERN SUBJECT MATTER EJOURNALS
MICHAEL C. JENSEN
Social Science Electronic Publishing (SSEP), Inc., Harvard Business School, National Bureau of Economic Research (NBER), European Corporate Governance Institute (ECGI)
Please contact us at the above addresses with your comments, questions or suggestions for ERN-Sub.