We study a multilateral negotiation procedure that allows for "partial agreements" in which responders are told only their own shares. Applications of our model include negotiations under "joint and several liability." Unlike previous models of multilateral bargaining with exit, we find that...

We study decentralized trade processes in general exchange economies and house allocation problems with and without money. The processes are affected by persistent random shocks stemming from agents' maximization of random utility. By imposing structure on the utility noise term --logit...

Stochastic stability is applied to the problem of exchange. We analyze the stochastic stability of two dynamic trading processes in a simple housing market. In both models traders meet in pairs at random and exchange their houses when trade is mutually beneficial, but occasionally they make...

This paper studies implementation of taxation methods in one-commodity environments in which the incomes of the agents are unknown to the planner. Feasibility out of equilibrium imposes that the mechanism depend on the environment. We present two mechanisms. The first one, which requires...

We study a Gale-like matching model in a large exchange economy, in which trade takes place through non-cooperative bargaining in coalitions of finite size. Under essentially the same conditions of core equivalence, we show that the strategic equilibrium outcomes of our model coincide with the...

Define the riskiness of a gamble as the reciprocal of the absolute risk aversion (ARA) of an individual with constant ARA who is indifferent between taking and not taking that gamble. We characterize this index by axioms, chief among them a "duality" axiom which, roughly speaking, asserts that...

We study the set of subgame perfect equilibria associated with the "n"-person noncooperative bargaining mechanism proposed by Hart and Mas-Colell (1992). Our results pertain to transferable utility games. The set of perfect equilibria depends on the parameter representing the "continuation...

I present a non-cooperative bargaining game, in which responders may exit at any time and have endogenous outside options. When the order of proposers corresponds to the power that players have in the underlying coalitional function, the unique Markov perfect equilibrium outcome of the game is...

We apply stochastic stability to study the evolution of bidding behaviour in private-value second-price, first-price and k-double auctions. The learning process has a strong component of inertia but with a small probability, the bids are modified in the direction of ex-post regrets. We identify...

This article describes the basic elements of the cooperative approach to game theory, one of the two counterparts of the discipline. After the presentation of some basic definitions, the focus will be on the core and the Shapley value, two of the most central solution concepts in cooperative...