Non-cooperative Bargaining and the Incomplete Information Core

Abstract

We consider information transmission in the core of an exchange economy with incomplete information by non-cooperative bargaining theory. Reformulating the coalitional voting game by Serrano and Vohra [Information transmission in coalitional voting games, J. of Economic Theory (2007), 117-137] so that an informed agent proposes an allocation, we define a notion of the informational core. A coalition has an informational objection to the status-quo allocation if and only if there exists an equilibrium rejection in the coalitional voting game. We present a non-cooperative sequential bargaining game in which coalitional voting games are repeated, and prove that a refinement of a sequential equilibrium of the bargaining game necessarily yields an allocation in the informational core.core, exchange economy, incomplete information, information transmission, non-cooperative bargaining