Markov equilibria in a model of bargaining in networks
Author(s)Abreu, Dilip; Manea, Mihai
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We study the Markov perfect equilibria (MPEs) of an infinite horizon game in which pairs of players connected in a network are randomly matched to bargain. Players who reach agreement are removed from the network without replacement. We establish the existence of MPEs and show that MPE payoffs are not necessarily unique. A method for constructing pure strategy MPEs for high discount factors is developed. For some networks, we find that all MPEs are asymptotically inefficient as players become patient.
DepartmentMassachusetts Institute of Technology. Department of Economics
Games and Economic Behavior
Abreu, Dilip, and Mihai Manea. “Markov Equilibria in a Model of Bargaining in Networks.” Games and Economic Behavior 75, no. 1 (May 2012): 1–16.
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