A non-cooperative foundation for the continuous Raiffa solution

This paper provides a non-cooperative foundation for (asymmetric generalizations of) the continuous Raiffa solution. Specifically, we consider a continuous-time variation of the classic Ståhl–Rubinstein bargaining model, in which there is a finite deadline that ends the negotiations, and in which each player’s opportunity to make proposals is governed by a player-specific Poisson process, in that the rejecter of a proposal becomes proposer at the first next arrival of her process. Under the assumption that future payoffs are not discounted, it is shown that the expected payoffs players realize in subgame perfect equilibrium converge to the continuous Raiffa solution outcome as the deadline tends to infinity. The weights reflecting the asymmetries among the players correspond to the Poisson arrival rates of their respective proposal processes

Searching for policy reforms

We construct a model of policy reform in which two players continually search for Pareto improving policies. The players have imperfect control over the proposals that are considered. Inefficient gridlock takes place due to the difficulty in finding moderate policies. The reform process is path dependent, with early agreements determining long-run outcomes. The process may also be cyclical, as players alternate between being more and less accommodating. Our model provides a noncooperative foundation for the “Raiffa path”, by which bargainers gradually approach the Pareto frontier

Three alternative (?) stories on the late 20th-century rise of game theory

The paper presents three different reconstructions of the 1980s boom of game theory and its rise to the present status of indispensable tool-box for modern economics. The first story focuses on the Nash refinements literature and on the development of Bayesian games. The second emphasizes the role of antitrust case law, and in particular of the rehabilitation, via game theory, of some traditional antitrust prohibitions and limitations which had been challenged by the Chicago approach. The third story centers on the wealth of issues classifiable under the general headline of "mechanism design" and on the game theoretical tools and methods which have been applied to tackle them. The bottom lines are, first, that the three stories need not be viewed as conflicting, but rather as complementary, and, second, that in all stories a central role has been played by John Harsanyi and Bayesian decision theory.game theory; mechanism design; refinements of Nash equilibrium; antitrust law; John Harsanyi