Noncooperative Foundations of the Area Monotonic Solution

Anbarci, N.

Abstract

Given a finite set of alternatives, players alternate making offers. Player 1 offers some alternative that 2 can accept or veto. If 2 accepts, it is enforced, and the game ends. Otherwise, 2 makes a counteroffer among the remaining alternatives, and so on. If all alternatives are vetoed, a disagreement alternative is enforced. First, we characterize the unique outcome of any subgame perfect equilibrium of this game. Then, we show that this outcome converges to the Area Monotonie Solution if the alternatives are uniformly distributed over the bargaining set, and as the number of alternatives tends to infinity.

Citation

Anbarci, N. (1993). Noncooperative Foundations of the Area Monotonic Solution. The Quarterly Journal of Economics, 108(1), 245-258. https://doi.org/10.2307/2118502

• Journal Article Type: Article
• Publication Date: 1993-02
• Deposit Date: Aug 17, 2018
• Journal: The Quarterly Journal of Economics
• Print ISSN: 0033-5533
• Electronic ISSN: 1531-4650
• Publisher: Oxford University Press
• Peer Reviewed: Peer Reviewed
• Volume: 108
• Issue: 1
• Pages: 245-258
• DOI: https://doi.org/10.2307/2118502
• Public URL: https://durham-repository.worktribe.com/output/1351458