Hans Haller

A letter to the editor on wage bargaining

Abstract The Rubinstein perfect information alternating offers bargaining model is problematic when applied to wage negotiations. A strike or any other industrial action is not an automatic consequence of a delay in reaching an agreement, because production can continue normally also when negotiations take place. This paper extends the Rubinstein model to incorporate the choice of calling a strike, and it is shown that in this model there is no longer a unique subgame perfect equilibrium, and that strikes with a length in real time can occur in equilibrium.

Nash networks with heterogeneous links

Abstract A non-cooperative model of network formation is developed. Link formation is one-sided. Information flow is two-way. The model builds on the work of Bala and Goyal who permit links to fail with a certain common probability. In our model the probability of failure can be different for different links. The set of networks which are Nash for suitably chosen model parameters consists of all essential networks. We specifically investigate Nash networks that are connected, super-connected, or stars. Efficiency, Pareto-optimality, and existence issues are discussed through examples. Three alternative model specifications are explored to address potential shortcomings.

Bargaining Power and Equilibrium Consumption

We examine how a shift of bargaining power within households operating in a competitive market environment affects equilibrium allocation and welfare. If price effects are sufficiently small, then typically an individual benefits from an increase of bargaining power, necessarily to the detriment of others. If price effects are drastic, the welfare of all household members moves in the same direction when bargaining power shifts, at the expense (or for the benefit) of outside consumers. Typically a shift of bargaining power within a set of households also impacts upon other households. We show that each individual of a sociological group tends to benefit, if he can increase his bargaining power, but suffers if others in his group do the same.

The selectope for cooperative games

Abstract. The selectope of a cooperative transferable utility game is the convex hull of the payoff vectors obtained by assigning the Harsanyi dividends of the coalitions to members determined by so-called selectors. The selectope is studied from a set-theoretic point of view, as superset of the core and of the Weber set; and from a value-theoretic point of view, as containing weighted Shapley values, random order values, and sharing values.

Collective Decisions and Competitive Markets

In a general equilibrium model, we allow for households with several, typically heterogeneous, members; households that make (efficient) collective consumption decisions where different households may use different collective decision mechanisms; yet households that operate within a competitive market environment. The interaction of two allocation mechanisms, collective decisions and competitive markets, is investigated, with a focus on the efficiency properties and decentralization possibilities of the dual allocation mechanism.

Null Players Out? Linear Values For Games With Variable Supports

The paper studies the consequences of the Null Player Out (NPO) property for single-valued solutions on the class of cooperative games in characteristic function form. We allow for variable player populations (supports or carriers). A solution satisfies the NPO property, if elimination of a null player does not affect the payoffs of the other players. Our main emphasis lies on individual values. For linear values satisfying the null player property and a weak symmetry property, necessary and sufficient conditions for the NPO property are derived.

Non-cooperative bargaining of N ⩾ 3 players

Abstract Extensions to N ⩾ 3 players of Rubensteins (1982) bargaining model with fixed common discount factor are considered. If voting takes place simultaneously, then any partition of the cake is a subgame-perfect Nash equilibrium outcome.

Household Decisions and Equilibrium Efficiency

A general equilibrium model is introduced where a household may consist of several members, each with individual preferences and/or resources. When households obey collective rationality, certain intrahousehold externalities can be fully internalized by the respective households so that competitive exchange among households is efficient. As a rule, however, such intrahousehold externalities are not fully internalized by individual household members acting in their personal interest so that competitive exchange among such individuals is only efficient in exceptional cases.

Non-Additive Beliefs in Solvable Games

This paper studies how the introduction of non-additive probabilities (capacities) affects the solvability of strategic games.

Ratification Requirement and Bargaining Power

When a large group of people is affected by a bargaining outcome, practical reasons often require that the group be represented by an agent in the bargaining. This paper addresses the issue of how the group ensures that the agent reaches an agreement that satisfies the group. The authors show that, by adopting a super-majority ratification rule, the group may improve its bargaining position and obtain a larger share of the bargaining surplus. However, a super-majority ratification rule also involves the risk that a beneficial agreement is rejected by a minority of the group. Copyright 1997 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.