Bargaining and Markets

Preface......Page 9
1.1 Some Basic Terms......Page 13
1.2 Outline of the Book......Page 15
 Notes......Page 18
Part 1.  Bargaining Theory......Page 19
2.1 Bargaining Problems......Page 21
2.2 Nash\'s Axioms......Page 23
2.3 Nash\'s Theorem......Page 25
2.4 Applications......Page 29
2.5 Is Any Axiom Superfluous?......Page 32
2.6 Extensions of the Theory......Page 35
 Notes......Page 38
3.1 The Strategic Approach......Page 41
3.2 The Structure of Bargaining......Page 42
3.3 Preferences......Page 44
3.4 Strategies......Page 49
3.5 Strategies as Automata......Page 51
3.6 Nash Equilibrium......Page 53
3.7 Subgame Perfect Equilibrium......Page 55
3.8 The Main Result......Page 56
3.9 Examples......Page 61
3.10 Properties of the Subgame Perfect Equilibrium......Page 62
3.12 Models in Which Players Have Outside Options......Page 66
3.13 A Game of Alternating Offers with Three Bargainers......Page 75
 Notes......Page 77
4.1 Introduction......Page 81
4.2 A Model of Alternating Offers with a Risk of Breakdown......Page 83
4.3 A Model of Simultaneous Offers: Nash\'s ``Demand Game\'\'......Page 88
4.4 Time Preference......Page 93
4.5 A Model with Both Time Preference and Risk of Breakdown......Page 98
4.6 A Guide to Applications......Page 100
 Notes......Page 101
5.1 Introduction......Page 103
5.2 A Bargaining Game of Alternating Offers......Page 104
5.3 Sequential Equilibrium......Page 107
5.4 Delay in Reaching Agreement......Page 116
5.5 A Refinement of Sequential Equilibrium......Page 119
5.6 Mechanism Design......Page 125
 Notes......Page 130
Part 2.  Models of Decentralized Trade......Page 133
6.1 Introduction......Page 135
6.2 Two Basic Models......Page 136
6.3 Analysis of Model A (A Market in Steady State)......Page 138
6.4 Analysis of Model B (Simultaneous Entry of All Sellers and Buyers)......Page 140
6.5 A Limitation of Modeling Markets Using the Nash Solution......Page 142
6.6 Market Entry......Page 143
6.7 A Comparison of the Competitive Equilibrium with the Market Equilibria in Models A and B......Page 146
 Notes......Page 148
7.1 Introduction......Page 149
7.2 The Model......Page 150
7.3 Market Equilibrium......Page 153
7.4 Analysis of Market Equilibrium......Page 155
7.5 Market Equilibrium and Competitive Equilibrium......Page 158
 Notes......Page 159
8.1 Introduction......Page 163
8.2 A Market in Which There Is a Single Indivisible Good......Page 164
8.3 Market Equilibrium......Page 165
8.4 A Market in Which There Are Many Divisible Goods......Page 168
8.5 Market Equilibrium......Page 171
8.6 Characterization of Market Equilibrium......Page 174
8.7 Existence of a Market Equilibrium......Page 180
 Notes......Page 182
9.1 Introduction......Page 185
9.2 Random Matching......Page 187
9.3 A Model of Public Price Announcements......Page 192
9.4 Models with Choice of Partner......Page 194
9.5 A Model with More General Contracts and Resale......Page 197
 Notes......Page 199
10.1 Introduction......Page 201
10.2 The Model......Page 202
10.3 Market Equilibrium......Page 203
10.4 The No-Discount Assumption......Page 207
 Notes......Page 209
References......Page 211
Index......Page 223