Intra Firm Bargaining and Shapley Values (original) (raw)

A Walrasian approach to bargaining games

Economics Letters, 1996

The paper presents and discusses an alternative approach to bargaining games. N-person bargaining games with complete information are shown to induce in a canonical way an Arrow-Debreu economy with production and private ownership. The unique Walras stable competitive equilibrium of this economy is shown to coincide with an asymmetric Nash bargaining solution of the underlying game with weights corresponding to the shares in production. In the case of an economy with equal shares in production, the unique competitive equilibrium coincides with the symmetric Nash bargaining solution. As this in turn represents the unique Shapley nontransferable utility (NTU) value our paper solves a problem posed by Shubik, namely to find a model in which the Shapley NTU value is a Walrasian equilibrium. "There has been some controversy about the interpretation of the A-transfer-value... no consensus has yet emerged on the significance of these concerns, which had been addressed.., in numerous explorations of the A-transfer-value as a tool for analysing games and markets..." .

Bargaining without a planner: a non-cooperative approach to the Shapley

We present a simple mechanism of negotiation, based on offers and counteroffers. This leads to a unified solution theory for nontransferable utility (NTU) games that has as special cases the Nash bargaining solution for pure bargaining problems, the Shapley value for transfer utility (TU) games, and the Shapley NTU value for general cooperative games. These results are similar to those of the bargaining mechanism of Hart and yielding the consistent value Owen (1898, 1992)). The mechanism presented here solves some problematic issues in Hart and Mas-Colell's model. Furthermore, a natural extension to games with coalition structure, yielding the Owen value (Owen (1977)) for TU games is provided.

Nash bargaining with downward rigid wages

Economics Letters, 1997

We study the effect of downward wage rigidity in a dynamic model when wages are negotiated according to Nash bargaining. Downward rigidity causes a decrease in the worker's expected utility. For the firms the effect is ambiguous. © 1997 Elsevier Science S.A.

Wage Bargaining in Industries with Market Power

Journal of Economics & Management Strategy, 1996

We develop a game-fheoretic version of the right-to-manage model of firmlevel bargaining where strategic interactions among firms are explicitly recognized. Our main aim is to investigate how equilibrium wages and employment react to changes in various labor and product market variables. W e show fhat our comparative statics results hinge crucially on the strategic nature of the game, which in turn is determined by the relative bargaining power of unions and managers.

Bargaining and Markets

The Canadian Journal of Economics, 1991

The detailed comments of Ken Binmore, Jeroen Swinkels, and Eric van Damme on a draft of the book guided us to significantly improve the accuracy of the arguments and quality of the exposition. We are most grateful to them. We are grateful also to Haruo Imai, Jack Leach, Avner Shaked, Asher Wolinsky, John Wooders, and Junsen Zhang for providing valuable comments on several chapters. Ariel Rubinstein's long and fruitful collaboration with Asher Wolinsky was the origin of many of the ideas in this book, especially those in Part 2. Asher deserves not only our gratitude but also the credit for those ideas.

Revisiting Nash wages negotiations in matching models

2009

In labour economics theory, wage negotiations use to rely on a Symmetric Nash Bargaining Solution. The aim of this study is to show that this kind of solution may be not relevant. Indeed, in a matching model framework, the comparison with the Kalai-Smorodinsky Solution suggests that a reflection should systematically be made with respect to the negotiation power of each

Equitable choices in bargaining games with joint production

Journal of Economic Behavior & Organization, 2001

In an experiment, we investigate two simple bargaining games with advance production: the ultimatum game and a symmetric demand game. After first choosing individual production levels, the two players determine how the"pie" is to be distributed. We determine several equity standards and propose a behavioral model which generates testable predictions. While game theory explains the observed decisions rather poorly, our behavioral model is supported by the data.

Noncooperative Models of Bargaining

1989

*Parts of this chapter use material from Rubinstein [1987], a survey of sequential bargaining models. Parts of Sections 5, 6, 7 and 8 are based on a draft of parts of Osborne and Rubinstein [1990]. **The first author wishes to thank Avner Shaked and John Sutton and the third author wishes to thank Asher Wolinsky for long and fruitful collaborations. Result 1 (Rubinstein, 1982) Under assumptions (TPO)-(TP5) the bargaining game has a unique sub-game-perfect equilibrium. In this equilibrium, agreement is reached immediately, and the players' utilities satisfy (2). Alternative versions of Rubinstein's proof appear in Binmore [1987b) and Shaked/Sutton [1984]. The following proof of Shaked and Sutton is especially useful for extensions and modifications of the theorem.