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Bargaining, coalitions and competition

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  • Nir Dagan
  • Roberto Serrano
  • Oscar Volij
Abstract
We study a Gale-like matching model in a large exchange economy, in which trade takes place through non-cooperative bargaining in coalitions of finite size. Under essentially the same conditions of core equivalence, we show that the strategic equilibrium outcomes of our model coincide with the Walrasian allocations of the economy. Our method of proof makes use of the theory of the core. With respect to previous work, our positive implementation result applies to a substantially larger class of economies: the model relaxes differentiability and convexity of preferences, and also admits an arbitrary number of divisible and indivisible goods. Copyright Springer-Verlag Berlin Heidelberg 2000

Suggested Citation

  • Nir Dagan & Roberto Serrano & Oscar Volij, 2000. "Bargaining, coalitions and competition," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 15(2), pages 279-296, March.
    • Handle: RePEc:spr:joecth:v:15:y:2000:i:2:p:279-296
    DOI: 10.1007/s001990050013
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    References listed on IDEAS

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    2. Perry, Motty & Reny, Philip J, 1994. "A Noncooperative View of Coalition Formation and the Core," Econometrica, Econometric Society, vol. 62(4), pages 795-817, July.
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    6. Gerard Debreu, 1963. "On a Theorem of Scarf," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 30(3), pages 177-180.
    7. Roberto Serrano & Rajiv Vohra, 1997. "Non-cooperative implementation of the core," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 14(4), pages 513-525.
    8. Rubinstein, Ariel & Wolinsky, Asher, 1985. "Equilibrium in a Market with Sequential Bargaining," Econometrica, Econometric Society, vol. 53(5), pages 1133-1150, September.
    9. Nir Dagan, 1994. "Recontracting and competition," Economics Working Papers 152, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 1996.
    10. Gale, Douglas M, 1986. "Bargaining and Competition Part I: Characterization," Econometrica, Econometric Society, vol. 54(4), pages 785-806, July.
    11. Serrano Roberto, 1995. "A Market to Implement the Core," Journal of Economic Theory, Elsevier, vol. 67(1), pages 285-294, October.
    12. Kaneko, Mamoru & Wooders, Myrna Holtz, 1989. "The core of a continuum economy with widespread externalities and finite coalitions: From finite to continuum economies," Journal of Economic Theory, Elsevier, vol. 49(1), pages 135-168, October.
    13. Gale, Douglas M, 1986. "Bargaining and Competition Part II: Existence," Econometrica, Econometric Society, vol. 54(4), pages 807-818, July.
    14. Hammond, Peter J. & Kaneko, Mamoru & Wooders, Myrna Holtz, 1989. "Continuum economies with finite coalitions: Core, equilibria, and widespread externalities," Journal of Economic Theory, Elsevier, vol. 49(1), pages 113-134, October.
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    Citations

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    Cited by:

    1. Kovalenkov, Alexander & Wooders, Myrna, 2003. "Approximate cores of games and economies with clubs," Journal of Economic Theory, Elsevier, vol. 110(1), pages 87-120, May.
    2. Shneyerov, Artyom & Wong, Adam Chi Leung, 2010. "The rate of convergence to perfect competition of matching and bargaining mechanisms," Journal of Economic Theory, Elsevier, vol. 145(3), pages 1164-1187, May.
    3. Serrano, Roberto, 2002. "Decentralized information and the Walrasian outcome: a pairwise meetings market with private values," Journal of Mathematical Economics, Elsevier, vol. 38(1-2), pages 65-89, September.
    4. Roberto Serrano & Oscar Volij, 2008. "Mistakes in Cooperation: the Stochastic Stability of Edgeworth's Recontracting," Economic Journal, Royal Economic Society, vol. 118(532), pages 1719-1741, October.
    5. Kunimoto, Takashi & Serrano, Roberto, 2004. "Bargaining and competition revisited," Journal of Economic Theory, Elsevier, vol. 115(1), pages 78-88, March.
    6. Roberto Serrano, 2007. "Bargaining," Working Papers 2007-06, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
    7. Yildiz, Muhamet, 2003. "Walrasian bargaining," Games and Economic Behavior, Elsevier, vol. 45(2), pages 465-487, November.
    8. Manea, Mihai, 2017. "Bargaining in dynamic markets," Games and Economic Behavior, Elsevier, vol. 104(C), pages 59-77.
    9. Serrano, Roberto & Volij, Oscar, 2000. "Walrasian Allocations without Price-Taking Behavior," Journal of Economic Theory, Elsevier, vol. 95(1), pages 79-106, November.
    10. Stephan Lauermann, 2013. "Dynamic Matching and Bargaining Games: A General Approach," American Economic Review, American Economic Association, vol. 103(2), pages 663-689, April.
    11. Satterthwaite, Mark & Shneyerov, Artyom, 2008. "Convergence to perfect competition of a dynamic matching and bargaining market with two-sided incomplete information and exogenous exit rate," Games and Economic Behavior, Elsevier, vol. 63(2), pages 435-467, July.
    12. Dipjyoti Majumdar & Artyom Shneyerov & Huan Xie, 2016. "An optimistic search equilibrium," Review of Economic Design, Springer;Society for Economic Design, vol. 20(2), pages 89-114, June.
    13. Marakulin, V., 2011. "Contracts and Domination in Competitive Economies," Journal of the New Economic Association, New Economic Association, issue 9, pages 10-32.
    14. Tomohiko Kawamori, 2021. "Core equivalence in collective-choice bargaining under minimal assumptions," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 9(2), pages 259-267, October.
    15. Athreya, Kartik B., 2014. "Big Ideas in Macroeconomics: A Nontechnical View," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262019736, April.
    16. Penta, Antonio, 2011. "Multilateral bargaining and Walrasian equilibrium," Journal of Mathematical Economics, Elsevier, vol. 47(4-5), pages 417-424.
    17. Gale, Douglas & Sabourian, Hamid, 2006. "Markov equilibria in dynamic matching and bargaining games," Games and Economic Behavior, Elsevier, vol. 54(2), pages 336-352, February.

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    More about this item

    Keywords

    Keywords and Phrases: Finite coalitions and Edgeworthian theory of exchange; Marginal rates of substitution and Jevonsian theory of exchange; Matching and bargaining; Core; Walrasian equilibrium.; JEL Classification Numbers: D51; D41; C78.;
    All these keywords.

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D41 - Microeconomics - - Market Structure, Pricing, and Design - - - Perfect Competition
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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