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Stable bargained equilibria for assignment games without side payments

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We consider NTU assignment games, which are generalizations of two-sided markets. Matched pairs bargain over feasible allocations; the disagreement outcome is endogenuously determined, taking in account outside options which are based on the current payoff of other players. An allocation is in equilibrium if and only if each pair is in equilibrium (no player wishes to rebargain). The set of equilibria is not empty and it naturally generalizes the intersection of the core and prekernel of TU assignment games. A set with similar properties does not exist for general NTU games. The main source of technical difficulties is the relatively complicated structure of the core in NTU games. We make a strong use of reduced games and consistency requirements. We generalize also the results obtained by Rochford (1984) for TU assignment games.

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This is a part of my M.Sc. Thesis written at the Hebrew University, Jerusalem and at the University of Heidelberg. I am deeply indebted to my advisor, Prof. Bezalel Peleg. I wish also to thank Professors Michael Maschler, Avraham Neyman and Terje Lensberg for some helpful discussions, and to Prof. Werner Böge for his hospitality in Heidelberg. Finally, the comments of two anonymous referees greatly improved a preliminary version of this paper.

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Moldovanu, B. Stable bargained equilibria for assignment games without side payments. Int J Game Theory 19, 171–190 (1990).

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  • Disagreement Outcome
  • Economic Theory
  • Game Theory
  • Technical Difficulty
  • Current Payoff