The demand commitment bargaining and snowballing cooperation

Winter, E. (1994) The demand commitment bargaining and snowballing cooperation. Economic Theory, 4 (2). pp. 255-273. ISSN 0938-2259

Abstract

A multi-person bargaining model based on sequential demands is studied for coalitional games with increasing returns to scale for cooperation. We show that for such games the (subgame perfect) equilibrium behavior leads to a payoff distribution which approaches the Shapley value as the money unit approaches 0. Subgame consistency and strategic equilibria are the main tools used in the analysis. The model is then applied to study a problem of public good consumption. © 1994 Springer-Verlag.