In a liability problem, the asset value of an insolvent firm must be distributed among the creditors and the firm itself, when the firm has some freedom in negotiating with the creditors. We model the negotiations using cooperative game theory and analyze the Shapley value to resolve such...

Solution concepts in social environments use either a direct or indirect dominance relationship, depending on whether it is assumed that agents are myopic or farsighted. Direct dominance implies indirect dominance, but not the reverse. Hence, the predicted outcomes when assuming myopic (direct)...

We first show through a counter-example that the existence result of Maskin: Bargaining, coalitions and externalities, Presidential address of the Econometric Society, 2003] does not extend beyond three players.Intuitively, the bargaining may not be able to continue because there may be no...

The ultimatum game models social exchange in situations in which the rational motive to maximize gains conflicts with fairness considerations. Using two independent behavioral measurements, the authors tested two contradicting predictions: that the preference for fairness is a deliberative...

This essay borrows heavily from the fields of game theory, baseball business strategy and neuropsychology. Knitting these together, the author advocates that mediators become inciters and advocates for an outcome that solves problems, irrespective of the amount in controversy and the initial gap...

We study the marriage problem where a probability distribution over matchings is chosen. The “core” has been central to the the analysis of the deterministic problem. This is particularly the case since it coincides with the (conceptually) simpler set of “stable” matchings. While the...

We consider the problem where agents bargain over their shares of a perfectly divisible commodity. The aim of this paper is to identify the class of bargaining solutions induced by dominant strategy implementable allocation rules. To this end, we characterize the class of dominant strategy...