Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/149007
Authors: 
Duman, Papatya
Trockel, Walter
Year of Publication: 
2016
Series/Report no.: 
Center for Mathematical Economics Working Papers 550
Abstract: 
The alternating offers game due to Rubinstein (1982) had been used by Binmore (1980) and by Binmore et.al. (1986) to provide via its unique subgame perfect equilibrium an approximate non-cooperative support for the Nash bargaining solution of associated cooperative two-person bargaining games. These results had strengthened the prominent role of the Nash bargaining solution in cooperative axiomatic bargaining theory and its application, for instance in labor markets, and have often even be interpreted as a mechanism theoretical implementation of the Nash solution. Our results in the present paper provide exact non-cooperative foundations first, in our Proposition, via weakly subgame perfect equilibria of a game that is a modification of Rubinstein's game, then in our Theorem, via sub-game perfect equilibria of a game that is a further modification of our first game. Moreover, they provide a general rule how to transform approximate support results into exact ones. Finally, we discuss the relation of the above mentioned support results, including our present ones, with mechanism theoretic implementation in (weakly) subgame perfect equilibrium of the Nash solution. There we come to the conclusion that a sound interpretation as an implementation can hardly be found except in very rare cases of extremely restricted domains of players' preferences.
Subjects: 
Nash program
Non-cooperative foundation
Implementation
Nash solution
Rubinstein game
Subgame perfect equilibrium
JEL: 
C7
C71
C72
C73
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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