In this paper, we study the generalized Nash bargaining solution of bilateral bargaining in any given network, which is equivalent to the bilateral balanced outcome of a cooperative game with a network structure. We first establish that it is without loss of generality to focus on any...

This paper studies multilateral negotiations among n players in an environment where there are externalities and where contracts forming coalitions can be written and renegotiated. The negotiation process is modeled as a sequential game of offers and counteroffers, and we focus on the stationary...

This paper proposes a model of multilateral contracting where players are engaged in two parallel interactions: they dynamically form coalitions and play a repeated normal form game with temporary and permanent decisions. We show that when outside options are independent of the actions of other...

This paper extends the theory of endogenous coalition formation, with complete information and transferable utility, to the overlapping case. We propose a cover function bargaining game which allows the formation of overlapping coalitions at equilibrium. We show the existence of subgame perfect...

Negotiations between buyers and suppliers that require sharing cost details to identify profitable relationship specific investments often fail and result in hold-ups. Based on inequity aversion, strategic uncertainty, and risk dominance criteria, we expect negotiators to be more reluctant to...

When there are three parties, instability problems brought about by the emptiness of the core of the corresponding cooperative game may cause the Coase Theorem to fail, even when other more direct impediments to bargaining are low. We show that the standard Coasean bargaining game involving...

This chapter surveys a sizable and growing literature on coalition formation. We refer to theories in which one or more groups of agents (“coalitions”) deliberately get together to jointly determine within-group actions, while interacting noncooperatively across groups. The chapter describes...

This chapter surveys recent models of coalition and network formation in a unified framework. Comparisons are drawn among various procedures of network and coalition formation, involving simultaneous and sequential moves. The survey also covers models of group and network formation by farsighted...

This paper proposes a model for multilateral contracting, where contracts are written and renegotiated over time, and where contracts may impose externalities on other agents. The paper derives several properties of the Markov perfect equilibria of the infinite state-space contracting model....

This paper offers a historical account of the bargaining theories. It includes (i) the calculation methods for bargaining, (ii) the bargaining theories for benefit, and (iii) the bargaining theory against cost. This paper proves that economists cannot offer any satisfactory solution to these...