Existence and indeterminacy of Markovian equilibria in dynamic bargaining games
The paper studies stationary Markov perfect equilibria in multidimensional models of dynamic bargaining, in which the alternative chosen in one period determines the status quo for the next. We generalize a sufficient condition for existence of equilibrium due to Anesi and Seidmann (2015). We then...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Published: |
Econometric Society
2017
|
| Online Access: | https://eprints.nottingham.ac.uk/47225/ |
| _version_ | 1848797494319775744 |
|---|---|
| author | Anesi, Vincent Duggan, John |
| author_facet | Anesi, Vincent Duggan, John |
| author_sort | Anesi, Vincent |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | The paper studies stationary Markov perfect equilibria in multidimensional models of dynamic bargaining, in which the alternative chosen in one period determines the status quo for the next. We generalize a sufficient condition for existence of equilibrium due to Anesi and Seidmann (2015). We then use this existence result to show that if a weak gradient restriction holds at an alternative, then when players are sufficiently patient, there is a continuum of equilibria with absorbing sets arbitrarily close to that alternative. A sufficient condition for our gradient restriction is that the gradients of all players' utilities are linearly independent at that alternative. When the dimensionality of the set of alternatives is high, this linear independence condition holds at almost all alternatives, and equilibrium absorbing sets are dense in the set of alternatives. This implies that constructive techniques, which are common in the literature, fail to identify many plausible outcomes in dynamic bargaining games. |
| first_indexed | 2025-11-14T20:04:46Z |
| format | Article |
| id | nottingham-47225 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| last_indexed | 2025-11-14T20:04:46Z |
| publishDate | 2017 |
| publisher | Econometric Society |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-472252020-05-04T19:11:11Z https://eprints.nottingham.ac.uk/47225/ Existence and indeterminacy of Markovian equilibria in dynamic bargaining games Anesi, Vincent Duggan, John The paper studies stationary Markov perfect equilibria in multidimensional models of dynamic bargaining, in which the alternative chosen in one period determines the status quo for the next. We generalize a sufficient condition for existence of equilibrium due to Anesi and Seidmann (2015). We then use this existence result to show that if a weak gradient restriction holds at an alternative, then when players are sufficiently patient, there is a continuum of equilibria with absorbing sets arbitrarily close to that alternative. A sufficient condition for our gradient restriction is that the gradients of all players' utilities are linearly independent at that alternative. When the dimensionality of the set of alternatives is high, this linear independence condition holds at almost all alternatives, and equilibrium absorbing sets are dense in the set of alternatives. This implies that constructive techniques, which are common in the literature, fail to identify many plausible outcomes in dynamic bargaining games. Econometric Society 2017-10-09 Article PeerReviewed Anesi, Vincent and Duggan, John (2017) Existence and indeterminacy of Markovian equilibria in dynamic bargaining games. Theoretical Economics . ISSN 1555-7561 (In Press) |
| spellingShingle | Anesi, Vincent Duggan, John Existence and indeterminacy of Markovian equilibria in dynamic bargaining games |
| title | Existence and indeterminacy of Markovian equilibria in dynamic bargaining games |
| title_full | Existence and indeterminacy of Markovian equilibria in dynamic bargaining games |
| title_fullStr | Existence and indeterminacy of Markovian equilibria in dynamic bargaining games |
| title_full_unstemmed | Existence and indeterminacy of Markovian equilibria in dynamic bargaining games |
| title_short | Existence and indeterminacy of Markovian equilibria in dynamic bargaining games |
| title_sort | existence and indeterminacy of markovian equilibria in dynamic bargaining games |
| url | https://eprints.nottingham.ac.uk/47225/ |