Nash bargaining solution under predonation
Author
Akyol, Ethem
Advisor
Koray, Semih
Date
2008Publisher
Bilkent University
Language
English
Type
ThesisItem Usage Stats
78
views
views
27
downloads
downloads
Abstract
We consider two person bargaining problems under predonation. Before the
bargaining solution is applied we allow the alteration of the bargaining set by
means of pre-donations of a share in one’s would-be payoffs to one’s opponent.
Thus, a pre-bargain stage is instituted in which the bargainers may manipulate,
via pre-donations, the (Nash) bargaining solution as applied in the next
stage.We firstly concentrate on the simple bargaining problems with bargaining
sets that have linear pareto frontier and show that the stronger bargainer
(with greater ideal payoff) giving a pre-donation, her best pre-donation transforming
the bargaining set into one on which the Nash bargaining solution
distributes payoffs so that while other bargainer gets exactly the same payoff
(as applied to the original simple bargaining problem), stronger bargainer
makes strictly better off. Then, we look for Stackelberg and Nash equilibria
of the so called ”predonation game”. Furthermore, we list our results for two
by two normal form games.