Bargaining and Power

42 Pages Posted: 17 Jul 2013

Date Written: July 16, 2013

Abstract

Given a simple game, a power configuration specifies the power of each player in each winning coalition. We introduce a new power configuration which takes into account bargaining among players in coalitions. We show that under very weak conditions on a bargaining solution there is a power configuration which is stable with respect to renegotiations. We further show that given this power configuration there is a coalition which is both internally and Nash stable. We consider two different bargaining solutions on apex games and show under which conditions there are core stable coalitions. Finally, we investigate how infeasible coalition might affect the outcome and apply our model to the German parliament.

Keywords: Coalition Formation, Power, Bargaining

JEL Classification: C71, D71

Suggested Citation

Karos, Dominik, Bargaining and Power (July 16, 2013). FEEM Working Paper No. 63.2013, Available at SSRN: https://ssrn.com/abstract=2294383 or http://dx.doi.org/10.2139/ssrn.2294383

Dominik Karos (Contact Author)

University of Oxford ( email )

Oxford
United Kingdom

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