Majority Rule in a Stochastic Model of Bargaining
32 Pages Posted: 2 May 2001
Date Written: 2001
Abstract
In this paper we consider multilateral stochastic bargaining models with general agreement rules. For n-player games where in each period a player is randomly selected to allocate a stochastic level of surplus and q (less than or equal to n) players have to agree on a proposal to induce its acceptance, we characterize the set of stationary subgame perfect equilibrium payoffs and establish their existence. We show that for agreement rules other than the unanimity rule, the equilibrium payoffs need not be unique. Furthermore, even when the equilibrium is unique, it need not be efficient.
Keywords: Noncooperative Bargaining, Voting Rules, Stochastic Games
JEL Classification: C73, C78, D70
Suggested Citation: Suggested Citation