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The Demand Bargaining Set: General Characterization and Application to Majority Games

Author

Listed:
  • Massimo Morelli

    (Department of Economics, Ohio State University)

  • Maria Montero

    (School of Economics, University of Nottingham)

Abstract
The cooperative solution concept introduced here, the demand bargaining set, contains the core and is included in the Zhou bargaining set, eliminating the “dominated” coalition structures. The demand vectors belonging to the demand bargaining set are self-stable. In the class of constant-sum homogeneous weighted majority games the demand bargaining set is non-empty and predicts a unique demand vector, namely a proportional distribution within minimal winning coalitions. The noncooperative implementation of the demand bargaining set is obtained for all the games that satisfy the one-stage property.

Suggested Citation

  • Massimo Morelli & Maria Montero, 2001. "The Demand Bargaining Set: General Characterization and Application to Majority Games," Economics Working Papers 0011, Institute for Advanced Study, School of Social Science.
    • Handle: RePEc:ads:wpaper:0011
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    References listed on IDEAS

    as
    1. Peter Sudhölter & Jos A. M. Potters, 2001. "The semireactive bargaining set of a cooperative game," International Journal of Game Theory, Springer;Game Theory Society, vol. 30(1), pages 117-139.
    2. Morelli, Massimo & Montero, Maria, 2003. "The demand bargaining set: general characterization and application to majority games," Games and Economic Behavior, Elsevier, vol. 42(1), pages 137-155, January.
    3. Daniel Granot & Michael Maschler, 1997. "The Reactive Bargaining Set: Structure, Dynamics and Extension to NTU Games," International Journal of Game Theory, Springer;Game Theory Society, vol. 26(1), pages 75-95.
    4. Massimo Morelli & Maria Montero, 2001. "The Stable Demand Set General Characterization and Application to Majority Games," Working Papers 01-03, Ohio State University, Department of Economics.
    5. Perez-Castrillo, David & Wettstein, David, 2000. "Implementation of Bargaining Sets via Simple Mechanisms," Games and Economic Behavior, Elsevier, vol. 31(1), pages 106-120, April.
    6. John G. Cross, 1967. "Some theoretic characteristics of economic and political coalitions," Journal of Conflict Resolution, Peace Science Society (International), vol. 11(2), pages 184-195, June.
    7. Maschler, Michael, 1992. "The bargaining set, kernel, and nucleolus," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 18, pages 591-667, Elsevier.
    8. Warwick, Paul V. & Druckman, James N., 2001. "Portfolio Salience and the Proportionality of Payoffs in Coalition Governments," British Journal of Political Science, Cambridge University Press, vol. 31(4), pages 627-649, October.
    9. Morelli, Massimo, 1999. "Demand Competition and Policy Compromise in Legislative Bargaining," American Political Science Review, Cambridge University Press, vol. 93(4), pages 809-820, December.
    10. Zhou Lin, 1994. "A New Bargaining Set of an N-Person Game and Endogenous Coalition Formation," Games and Economic Behavior, Elsevier, vol. 6(3), pages 512-526, May.
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    Citations

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    Cited by:

    1. Montero, Maria, 2002. "Non-cooperative bargaining in apex games and the kernel," Games and Economic Behavior, Elsevier, vol. 41(2), pages 309-321, November.
    2. Emiliya Lazarova & Peter Borm & Maria Montero & Hans Reijnierse, 2011. "A bargaining set for monotonic simple games based on external and internal stability," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 19(1), pages 54-66, July.
    3. Emiliya Lazarova & Peter Borm & Bas Velzen, 2011. "Coalitional games and contracts based on individual deviations," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 19(2), pages 507-520, December.
    4. Maleva, Tatiana Mikhailovna (Малева, Татьяна Михайловна) & Kirillova, M. K. (Кириллова, М. К.) & Mkrtchyan, Nikita (Мкртчян, Никита) & Florinskaya, Yulia (Флоринская, Юлия) & Lyashok, Victor (Ляшок, В, 2015. "A Comprehensive Study of Regional Labor Markets: The Structural Imbalances and the Behavior of Participants. Monitoring of Wages, the Experience of Reforming the System of Remuneration of Public Secto," Working Papers mak15n7, Russian Presidential Academy of National Economy and Public Administration, revised 01 Oct 2015.
    5. Montero, Maria & Vidal-Puga, Juan J., 2011. "Demand bargaining and proportional payoffs in majority games," Games and Economic Behavior, Elsevier, vol. 71(2), pages 395-408, March.
    6. Aaron Kamm & Simon Siegenthaler, 2024. "Commitment timing in coalitional bargaining," Experimental Economics, Springer;Economic Science Association, vol. 27(1), pages 130-154, March.
    7. Roberto Serrano, 2005. "Fifty years of the Nash program, 1953-2003," Investigaciones Economicas, Fundación SEPI, vol. 29(2), pages 219-258, May.
    8. Ahmet Alkan & Alparslan Tuncay, 2014. "Pairing Games and Markets," Working Papers 2014.48, Fondazione Eni Enrico Mattei.
    9. Maria Montero & Alex Possajennikov, 2021. "An Adaptive Model of Demand Adjustment in Weighted Majority Games," Games, MDPI, vol. 13(1), pages 1-17, December.
    10. Frechette, Guillaume & Kagel, John H. & Morelli, Massimo, 2005. "Nominal bargaining power, selection protocol, and discounting in legislative bargaining," Journal of Public Economics, Elsevier, vol. 89(8), pages 1497-1517, August.
    11. Montero, Maria & Vidal-Puga, Juan J., 2007. "Demand Commitment in Legislative Bargaining," American Political Science Review, Cambridge University Press, vol. 101(4), pages 847-850, November.
    12. Guillaume Fréchette & John H. Kagel & Massimo Morelli, 2005. "Behavioral Identification in Coalitional Bargaining: An Experimental Analysis of Demand Bargaining and Alternating Offers," Econometrica, Econometric Society, vol. 73(6), pages 1893-1937, November.
    13. Debraj Ray & Rajiv Vohra, 2015. "The Farsighted Stable Set," Econometrica, Econometric Society, vol. 83(3), pages 977-1011, May.
    14. Joosung Lee, 2013. "Bargaining and Buyout," 2013 Papers ple701, Job Market Papers.
    15. Morelli, Massimo & Montero, Maria, 2003. "The demand bargaining set: general characterization and application to majority games," Games and Economic Behavior, Elsevier, vol. 42(1), pages 137-155, January.

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    More about this item

    Keywords

    Bargaining Sets; Stable Demands; Undominated Coalition Structures; Weighted Majority Games; Proportional Payoffs;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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