Kantian equilibria of a class of Nash bargaining games

Date
2023-02-13
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Source Title
Journal of Public Economic Theory
Print ISSN
1097-3923
Electronic ISSN
1467-9779
Publisher
John Wiley and Sons Inc
Volume
25
Issue
4
Pages
867 - 891
Language
en_US
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Abstract

We study Kantian equilibria of an (Figure presented.) -player bargaining game, which is a modified version of the well-known divide-the-dollar game. We first show that the Kantian equilibrium exists under fairly minimal assumptions. Second, if the bankruptcy rule used satisfies equal treatment of equals, and is almost nowhere proportional, then only equal division can prevail in any Kantian equilibrium. On the other hand, we show that an “anything goes” type result emerges only under the proportional rule. Finally, using hybrid bankruptcy rules that we construct in a novel fashion, we can characterize the whole equilibrium set. Our results highlight the interactions between institutions (axiomatic properties of division rules) and agents' equilibrium behavior.

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Published Version (Please cite this version)