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Bargaining power in stationary parallelogram games

Taub, B.; Kibris, O.

Authors

B. Taub

O. Kibris



Abstract

A stationary variant of the repeated prisoners' dilemma in which the game frontier is a parallelogram is analyzed. By using the probabilistic cheap talk concept of (3), the discount factor becomes fungible, and for a critical value of the discount factor a unique Pareto-optimal and Pareto-dominant solution can be found. The relative bargaining power of the players can be quantified in terms of the shape of the parallelogram. If the parallelogram is asymmetric, the solution results in an asymmetric allocation of payoffs. Players with more bargaining power receive a greater share of the allocation. The solution satisfies some standard bargaining axioms within the class of parallelogram games. A characterization is provided in terms of these axioms and one new axiom, weak-monotonicity, which is in the spirit of, but different from, the Kalai-Smorodinsky restricted-monotonicity axiom.

Citation

Taub, B., & Kibris, O. (2004). Bargaining power in stationary parallelogram games. Review of Economic Design, 8(4), 449-464. https://doi.org/10.1007/s10058-004-0114-6

Journal Article Type Article
Publication Date Apr 1, 2004
Deposit Date Jul 20, 2011
Journal Review of Economic Design
Print ISSN 1434-4742
Electronic ISSN 1434-4750
Publisher Springer
Peer Reviewed Peer Reviewed
Volume 8
Issue 4
Pages 449-464
DOI https://doi.org/10.1007/s10058-004-0114-6
Public URL https://durham-repository.worktribe.com/output/1505960

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