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Theory and Decision

, Volume 85, Issue 3–4, pp 495–508 | Cite as

Implementing egalitarianism in a class of Nash demand games

  • Emin Karagözoğlu
  • Shiran Rachmilevitch
Article
  • 342 Downloads

Abstract

We add a stage to Nash’s demand game by allowing the greedier player to revise his demand if the demands are not jointly feasible. If he decides to stick to his initial demand, then the game ends and no one receives anything. If he decides to revise it down to \(1-x\), where x is his initial demand, the revised demand is implemented with certainty. The implementation probability changes linearly between these two extreme cases. We derive a condition on the feasible set under which the two-stage game has a unique subgame perfect equilibrium. In this equilibrium, there is first-stage agreement on the egalitarian demands. We also study two n-player versions of the game. In either version, if the underlying bargaining problem is “divide-the-dollar,” then equal division is sustainable in a subgame perfect equilibrium if and only if the number of players is at most four.

Keywords

Nash demand game Divide-the-dollar Fair division 

Notes

Acknowledgements

The authors thank an anonymous referee for a helpful report. Emin Karagözoğlu thanks TÜBİTAK (The Scientific and Technological Research Council of Turkey) for the post-doctoral research fellowship. Usual disclaimers apply.

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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Department of EconomicsBilkent UniversityAnkaraTurkey
  2. 2.CESifoMunichGermany
  3. 3.Department of EconomicsUniversity of HaifaHaifaIsrael

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