An exact formula for the lion's share: A model of preplay negotiation

• 成果类型: Article
• 署名作者: Bensaid, B; GaryBobo, RJ
• 署名单位: CY Cergy Paris Universite
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1006/game.1996.0042
• 发表日期: 1996
• 页码: 44-89

摘要

We study a game-theoretic model of preplay negotiation with three players, A, B and C. Player A (the leader) can sequentially offer a finite number T of contracts to the other players prior to his (her) choice of an action affecting B and C's payoffs. Contracts simply specify path-dependent transfers between the players. The bargaining procedure is a game in extensive form with perfect and complete information. We compute the subgame perfect equilibria of this game and provide explicit formulas for equilibrium payoffs. It is shown that if T = 2, player A will contract with B and C sequentially, but that equilibrium actions are not necessarily Pareto-efficient. Equilibria become efficient when T = 3. Finally, player A's equilibrium payoff reaches a maximum when T = 4. Thus, the leader's strategic surplus extraction possibilities are exhausted after a finite number of rounds. We show that the model has many economic applications and can be used as a building block to solve more complex problems in which preplay negotiation takes place, such as oligopoly problems. It can be viewed as an attempt to construct a purely noncooperative theory of collusion, without the help of repeated play. (C) 1996 Academic Press, Inc.