Multilateral Non-Cooperative Bargaining in a General Utility Space

We consider an n-player bargaining problem where the utility possibility set is compact, convex, and stricly comprehensive. We show that a stationary subgame perfect Nash equilibrium exists, and that, if the Pareto surface is differentiable, all such equilibria converge to the Nash bargaining solution as the length of a time period between offers goes to zero. Without the differentiability assumption, convergence need not hold.multilateral, bargaining, general utility set

p(x+y)=p(x)+p(y)-p(x)p(y)

I show that if x and y are regarded as investments in R&D and p is the probability of discovery and if p satis…es p(x+y)=p(x)+p(y)-p(x)p(y) then p is practically uniquely determined.

Bargaining with Many Players: A Limit Result

We provide a simple characterization of the stationary subgame perfect equilibrium of an alternating offers bargaining game when the number of players increases without a limit. Core convergence literature is emulated by increasing the number of players by replication. The limit allocation is interpreted in terms of Walrasian market for being the first proposer.non-cooperative bargaining, stationary equilibrium, replication, Walrasian market

Demented Prisoners

We study infinitely repeated Prisoners' Dilemma, where one of the players may be demented. If a player gets demented in period t after his choice of action, he is stuck to this choice for the rest of the game. So if his last choice was ``cooperate'' just before dementia struck him, then he's bound to cooperate always in the future. Even though a demented player cannot make choices any more he enjoys the same payoffs from strategy profiles as he did when healthy. A player may prove he is still healthy by showing a (costly) health certificate. This is possible only as long as the player really is healthy: a demented player cannot get a clean bill of health. We study an asymmetric information game where it is known that player 1 cannot get demented but player 2 may be either a ``healthy'' type who will never be demented or a ``dementible'' type who eventually will get demented. We study when cooperation can be maintained in a perfect Bayesian equilibrium with at most health check.prisoners' dilemma, dementia, co-operation

Inefficiency caused by random matching and heterogeneity

I study an economy with sellers and buyers with unit supplies and unit demands. Both parties have valuations uniformly distributed on a unit interval. I quantify the ineffi ciency, compared to the Walrasian markets, when the agents meet randomly. There are several causes of ineffi ciency that I deal with separately. First, even if there is perfect information about valuations it makes a diff erence whether all agents participate in the markets or whether only those who would trade in the Walrasian market participate. The same applies when there is private information about valuations.info:eu-repo/semantics/publishedVersio

Patents Hinder Collusion

We argue that a patent system makes collusion among innovators more difficult. Our simple argument is based on two properties of the patent system. First, a patent not only protects against infringement but also against retaliation by former collusion members. Second, a deviator has an equal chance with former collusion members to get a patent on new innovations. We show that if a patent system reduces spillovers, it renders collusion impossible. Moreover, it is possible to design a patent system that simultaneously increases knowledge spillovers and eliminates collusionPatens, Collusion, Secrecy, Innovation

Cumulative Innovations : Intellectual Property Regimes and Incentives to Innovate

When innovations are both sequential and complementary as in the software or the semi-conductor industries, James Bessen and Eric Maskin (2002) argue that patents are likely to reduce firms ’ incentives to innovate as compared to a regime with no protection. We develop a model close to that of Bessen and Maskin except that we endogenize the probability of success of each innovation (firms choose their R&D investments, reflecting the incentives to innovate and determining the success probability of an R&D program) and introduce an explicit model of a copyright. Our main results contradict Bessen and Maskin: individual and aggregate R&D ∗We thank Matti Liski, Pauli Murto, Otto Toivanen, and Juuso Välimäki for help and useful comments