Center for Economic Research, Department of Economics, University of Minnesota
I add endogenous bargaining possibilities do develop criteria to determine
which statements are credible in a three-player model with complete information
where pairs, in a sequential order, can formulate simultaneous negotiation
statements. Joint plans are credible if they are the outcome of a plan Nash bargaining
problem-the pair bargains cooperatively over the equilibrium payoffs
induced by tenable and reliable plans-unless one or both bargainers are indifferent
to bargaining. Then, a credible plan is up to the future-request by the
oldest pair ("of friends") among the past pairs that successfully cooperated and
included one of the indifferent players. I interpret this model as an almost non
cooperative (ANC) modification of the three-player Aumann-Myerson (1988)
sequential network formation game. Whenever discussing a link two players
can bargain non cooperatively out of the sum of their Myerson values (1977)
in the prospective network and enunciate simultaneous negotiation statements.
The disagreement plan suggests link rejection. Sequentially Nash (1950) coherent
plans can be defined and exist. Analytical payoffs are unique. In strictly
superadditive cooperative games the complete graph never forms.
Nieva, R., (2005), "An ANC Payoff Function for Networks with Sequentially Nash Coherent Plans", Discussion Paper No. 323, Center for Economic Research, Department of Economics, University of Minnesota.
Discussion Paper 323
An ANC Payoff Function for Networks with Sequentially Nash Coherent Plans.
Center for Economic Research, Department of Economics, University of Minnesota.
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