Sequential share bargaining

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Working paper
P. Jean-Jacques Herings, Arkadi Predtetchinski
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This paper presents a new extension of the Rubinstein-St˚ahl bargaining model to the case with n players, called sequential share bargaining. The bargaining protocol is natural and has as its main feature that the players’ shares in the cake are determined sequentially. The bargaining protocol requires unanimous agreement for proposals to be implemented. Unlike all existing bargaining protocols with unanimous agreement, the resulting game has unique subgame perfect equilibrium utilities for any value of the discount factor. In equilibrium, agreement is reached immediately. The results are therefore qualitatively the same as in the two player case. The result builds on an analysis of so-called one-dimensional bargaining problems. We show that also one-dimensional bargaining problems have unique subgame perfect equilibrium utili- ties for any value of the discount factor, and that also in one-dimensional bargaining problems agreement is reached immediately.
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