Tomohiko Kawamori

A note on selection of proposers in coalitional bargaining

This paper presents a noncooperative coalitional bargaining model with a generalized selection of proposers, which includes two frequently used selection protocols, i.e., the fixed-order-proposer protocol and the random-proposer protocol. In the model, proposers are selected in each bargaining round according to recognition probabilities contingent on the identity of the rejector in the preceding round. This paper provides an equivalent condition for the existence of an efficient equilibrium for each discount factor. It is shown that for each discount factor, the possibility of the existence of an efficient equilibrium decreases as the probability that the rejector in the preceding round becomes a proposer increases.

Nash bargaining solution under externalities

We define a Nash bargaining solution (NBS) of partition function games. Based on a partition function game, we define an extensive game, which is a propose–respond sequential bargaining game where the rejecter of a proposal exits from the game with some positive probability. We show that the NBS is supported as the expected payoff profile of any stationary subgame perfect equilibrium (SSPE) of the extensive game such that in any subgame, a coalition of all active players forms immediately. We provide a necessary and sufficient condition for such an SSPE to exist. Moreover, we consider extensions to the cases of nontransferable utilities, time discounting and multiple-coalition formation.

Rejecter-proposer legislative bargaining with heterogeneous time and risk preferences

This article considers a legislative bargaining model in which the rejecter in the previous round becomes the proposer in the current round. We allow the time and risk preferences to differ across players and the voting quota to be a supermajority or submajority. We show that there exists a stationary subgame perfect equilibrium and that each player’s equilibrium payoff conditional on being a proposer is unique, and we explicitly derive the equilibria and equilibrium payoff. We compare a proposer’s equilibrium payoff when the time interval between two consecutive rounds tends to zero with respect to the protocols of the selection of proposers and the voting quota: we show that a proposer’s equilibrium payoff can be greater in this article’s rejecter-proposer model than in the Baron–Ferejohn random-proposer model; even though the voting quota increases, a proposer’s equilibrium payoff can increase.

The Way of Offering Vertically Differentiated Airline Services

This paper investigates should an airline offer vertically differentiated services, which are substitutes of its own services. The airline operates a certain number of direct flights to offer various types of services including nonstop, one-stop, or multiple-stop services. Homogenous passengers care about the fare and the flight(s) schedule when using a service. Under this general setting, we show that it is optimal for the airline to offer only one type of service in any particular city-pair market. This result supports a number of previous works that primarily argue network efficiency under the condition that only one type of service is offered in a particular market. This result also provides a theoretical explanation for the empirical finding that airlines that offer one-stop service through a hub are less likely to enter that same market with nonstop service than those that do not. This paper also presents an example of that if passengers horizontally differentiate among the type of services by other factors, the airline may offer multiple types of substitutive services in a market on its network.

Outcomes of bargaining and planning in single facility location problems

In this paper, we investigate a model where, on a tree network, players collectively choose the location of a single public facility by noncooperative alternating-offer bargaining with the unanimity rule. We show the existence of a stationary subgame perfect equilibrium and the characterization of stationary subgame perfect equilibria. We also show that the equilibrium location converges to the Rawls location (the Rawlsian social welfare maximizer) as the discount factor tends to 1; however, it does not relate to the Weber location (the Benthamite social welfare maximizer).

Airline Alliances with Low Cost Carriers

A major carrier operates one hub linking multiple non-hub cities. It forms an alliance with a low cost carrier whose nonstop service competes with its one-stop service. The alliance’s joint profit is maximized by withdrawing the competing one-stop (nonstop) service when the major carrier’s operating cost and connecting passengers’ hub-through additional time costs are large (small). The realized alliance is welfare-improving (welfare-decreasing) when these costs are large or small (intermediate). These findings suggest the necessity of alliance regulation. In some regions, the necessity of regulation does not monotonically change as the network size increases.

A repeated coalitional bargaining model

This paper presents a repeated coalitional bargaining model in which after a coalitional bargaining terminates with an agreement, another coalitional bargaining begins. It provides a necessary and sufficient condition for the existence of an efficient SSPE, i.e., an SSPE in which the grand coalition is formed without delay. This condition implies that as (i) payoffs from future coalitional bargaining are more valuable and (ii) players are less patient, an efficient SSPE more easily exists.

Partially cooperative games

In this paper, we present a general model in which mutually dependent negotiations are simultaneously conducted and define a solution concept for the model. We provide a sufficient condition for the solution to exist and show that the solutions approximately coincide with the equilibrium outcomes of extensive form games. We present a solution to the merger paradox as an application.

Equivalent conditions for the existence of an efficient equilibrium in coalitional bargaining with externalities and renegotiations

Abstract We consider a noncooperative coalitional bargaining game with externalities and renegotiations. We provide the necessary and sufficient condition for an efficient stationary subgame perfect equilibrium to exist. This condition states that a Nash bargaining solution is immune to any blocking.