Simple Coalitional Games with Beliefs

We introduce coalitional games with beliefs (CGBs), a natural generalization of coalitional games to environments where agents possess private beliefs regarding the capabilities (or types) of others. We put forward a model to capture such agent-type uncertainty, and study coalitional stability in this setting. Specifically, we introduce a notion of the core for CGBs, both with and without coalition structures. For simple games without coalition structures, we then provide a characterization of the core that matches the one for the full information case, and use it to derive a polynomial-time algorithm to check core nonemptiness. In contrast, we demonstrate that in games with coalition structures allowing beliefs increases the computational complexity of stability-related problems. In doing so, we introduce and analyze weighted voting games with beliefs, which may be of independent interest. Finally, we discuss connections between our model and other classes of coalitional games

Advances in Negotiation Theory: Bargaining, Coalitions and Fairness

Bargaining is ubiquitous in real-life. It is a major dimension of political and business activities. It appears at the international level, when governments negotiate on matters ranging from economic issues (such as the removal of trade barriers), to global security (such as fighting against terrorism) to environmental and related issues (e.g. climate change control). What factors determine the outcome of negotiations such as those mentioned above? What strategies can help reach an agreement? How should the parties involved divide the gains from cooperation? With whom will one make alliances? This paper addresses these questions by focusing on a non-cooperative approach to negotiations, which is particularly relevant for the study of international negotiations. By reviewing noncooperative bargaining theory, non-cooperative coalition theory, and the theory of fair division, this paper will try to identify the connection among these different facets of the same problem in an attempt to facilitate the progress towards a unified framework.Negotiation theory, Bragaining, Coalitions, Fairness, Agreements

Advances in negotiation theory : bargaining, coalitions, and fairness

Bargaining is ubiquitous in real life. It is a major dimension of political and business activities. It appears at the international level, when governments negotiate on matters ranging from economic issues (such as the removal of trade barriers), to global security (such as fighting against terrorism) to environmental and related issues (such as climate change control). What factors determinethe outcomes of such negotiations? What strategies can help reach an agreement? How should the parties involved divide the gains from cooperation? With whom will one make alliances? The authors address these questions by focusing on a noncooperative approach to negotiations, which is particularly relevant for the study of international negotiations. By reviewing noncooperative bargaining theory, noncooperative coalition theory, and the theory of fair division, they try to identify the connections among these different facets of the same problem in an attempt to facilitate progress toward a unified framework.Economic Theory&Research,Social Protections&Assistance,Environmental Economics&Policies,Scientific Research&Science Parks,Science Education

Dynamic Multilateral Markets

We study dynamic multilateral markets, in which players’ payoffs result from coalitional bargaining. In this setting, we establish payoff uniqueness of the stationary equilibria when players exhibit some degree of impatience. We focus on market games with different player types, and derive under mild conditions an explicit formula for each type’s equilibrium payoff as market frictions vanish. The limit payoff of a type depends in an intuitive way on the supply and the demand for this type in the market, adjusted by the type-specific bargaining power. Our framework may be viewed as an alternative to the Walrasian price-setting mechanism. When we apply this methodology to the analysis of labor markets, we can determine endogenously the equilibrium firm size and remuneration scheme. We find that each worker type in a stationary market equilibrium is rewarded her marginal product, i.e. we obtain a strategic underpinning of the neoclassical wage. Interestingly, we can also replicate some standardized facts from the search-theoretical literature such as positive equilibrium unemployment.Multilateral Bargaining, Dynamic Markets, Labor Markets

Game theory

game theory

Advances in Negotiation Theory: Bargaining, Coalitions and Fairness

Bargaining is ubiquitous in real-life. It is a major dimension of political and business activities. It appears at the international level, when governments negotiate on matters ranging from economic issues (such as the removal of trade barriers), to global security (such as fighting against terrorism) to environmental and related issues (e.g. climate change control). What factors determine the outcome of negotiations such as those mentioned above? What strategies can help reach an agreement? How should the parties involved divide the gains from cooperation? With whom will one make alliances? This paper addresses these questions by focusing on a non-cooperative approach to negotiations, which is particularly relevant for the study of international negotiations. By reviewing non-cooperative bargaining theory, non-cooperative coalition theory, and the theory of fair division, this paper will try to identify the connection among these different facets of the same problem in an attempt to facilitate the progress towards a unified framework.Negotiation theory, Bargaining, Coalitions, Fairness, Agreements

Heterogenous Human Capital in a Model of Coalitional Bargaining Between Multinational Corporations and Host Country Enterprises

We use the logic of ex-ante coalitional bargaining to explain the stylized fact that technology licensors typically cannot extract the entire surplus generated by their international licensing transactions. We assume a multinational corporation capable of supplying an 'external management' input (e.g. supply-chain management) and two types of host-country enterprise--one able to supply only an 'internal management' input (e.g. labor supervision) and the other able to provide both types of management. Cooperation with the first type requires profit sharing, but as this does not give adequate incentives to either side, the result is a Nash equilibrium in input levels. In order to avoid this suboptimal outcome, licensors bid up the rents they offer to the second type, which can be incentivized to supply first-best levels of both inputs through contracts specifying only a fixed per-period licensing fee.

Cooperative Games with Overlapping Coalitions

In the usual models of cooperative game theory, the outcome of a coalition formation process is either the grand coalition or a coalition structure that consists of disjoint coalitions. However, in many domains where coalitions are associated with tasks, an agent may be involved in executing more than one task, and thus may distribute his resources among several coalitions. To tackle such scenarios, we introduce a model for cooperative games with overlapping coalitions--or overlapping coalition formation (OCF) games. We then explore the issue of stability in this setting. In particular, we introduce a notion of the core, which generalizes the corresponding notion in the traditional (non-overlapping) scenario. Then, under some quite general conditions, we characterize the elements of the core, and show that any element of the core maximizes the social welfare. We also introduce a concept of balancedness for overlapping coalitional games, and use it to characterize coalition structures that can be extended to elements of the core. Finally, we generalize the notion of convexity to our setting, and show that under some natural assumptions convex games have a non-empty core. Moreover, we introduce two alternative notions of stability in OCF that allow a wider range of deviations, and explore the relationships among the corresponding definitions of the core, as well as the classic (non-overlapping) core and the Aubin core. We illustrate the general properties of the three cores, and also study them from a computational perspective, thus obtaining additional insights into their fundamental structure