This paper presents a model of network formation with costly links. We endogenize the amount of cost born by each player involved in a bilateral link by considering that these shares result from bargaining. We analyze this feature in a context of coordination games. We show that, if the cost of...

We consider a two-player strategic bargaining model with discounting in which (i) the interim disagreement point in each period is stochastically determined at the beginning of the period, and (ii) the proposing player can delay in making an offer. Unlike many other bargaining models of complete...

Sections 8(a)(3) and 8(a)(5) of the National Labor Relations Act prohibit a firm from unilaterally increasing the wage it pays the union during the negotiation of a new wage contract. To understand this regulation, we study a counterfactual model where the firm can unilaterally increase wages...

The players behave quite differently in the negotiation model under different time preferences than under common time preferences. Conventional analysis in this literature relies on the key presumption that all continuation payoffs are bounded from above by the bargaining frontier resulted from...

We study an asymmetric two-player bargaining game with risk of breakdown and no discounting. We characterize the modified evolutionarily stable strategies (MESS) by modelling strategies as automata. Payoff and complexity considerations are taken in the automata-selection process. We show that a...

We prove existence of stationary Markov perfect equilibria in an infinite-horizon model of legislative policy making in which the policy outcome in one period determines the status quo for the next. We allow for a multidimensional policy space and arbitrary smooth stage utilities, and we assume...

We study how group size affects cooperation in an infinitely repeated n-player Prisoner's Dilemma (PD) game. In each repetition of the game, groups of size n less than or equal to M are randomly and anonymously matched from a fixed population of size M to play the n-player PD stage game. We...

An evolutionary style model of recontracting is given which guarantees convergence to core allocations of an underlying cooperative game. Unlike its predecessors in the evolution/learning literature, this is achieved without assumptions of convexity of the characteristic function or a reliance...

The evolution of cooperation has been the focus of intense research in the social sciences, natural sciences (especially biology), and even computer science. It has long been recognized that the possibility of future consequences is crucial to the emergence of rational cooperation. It was...

We propose a bargaining process with alternating proposals as a way of solving non-cooperative games, giving rise to Pareto efficient agreements which will, in general, differ from the Nash equilibrium of the constituent games.