Bargaining with a ruler
type: Item
instance of: scholarly article
title: Bargaining with a ruler
zbMATH Open document ID: 0774.90095
DOI: 10.1007/BF01245456
author: I. Buch
author: Yair Tauman
published in: International Journal of Game Theory
publication date: 1992-12-07T00:00:00Z
review text: Let \(G\) be an \(n+1\) player game. Player 0 is called the ruler and plays a special role, in contrast to the remaining \(n\) players, indexed by \(i\), \(i>0\). Players 1 to \(n\) play a noncooperative game among themselves, while each of them plays a 2-person bargaining game with the ruler. Let \(G_{-i}\) be the reduced game which results when player \(i\) refuses to bargain with the ruler. The disagreement point of the bargaining game between player \(i\) and the ruler is determined by the payoff \(i\) gets in \(G_{-i}\). The paper presents a set of axioms for a solution to this game, some in the spirit of the axioms for Nash's bargaining solution, but also including a crucial consistency condition. The main result of the paper is to axiomatize a unique solution for \(G\). This solution is interpreted in terms of monopolist offering a cost-saving innovation to an industry in Cournot competition. Other interesting interpretations of this result are also possible.
Mathematics Subject Classification ID: 91A12
Mathematics Subject Classification ID: 91B26
zbMATH DE Number: 70154
zbMATH Keywords: ruler consistency
zbMATH Keywords: cost-reducing innovation
zbMATH Keywords: disagreement point
zbMATH Keywords: bargaining game
zbMATH Keywords: monopolist
zbMATH Keywords: Cournot competition
MaRDI profile type: Publication
cites work: Other Solutions to Nash's Bargaining Problem
cites work: Optimal licensing of cost-reducing innovation
cites work: On the value of information in a strategic conflict
cites work: The Bargaining Problem
full work available at URL: https://doi.org/10.1007/bf01245456
OpenAlex ID: W2052967215
description: scientific article; zbMATH DE number 70154