Non-cooperative bargaining in natural monopolies

Eyal Winter*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

11 Scopus citations

Abstract

The joint production of a single output from a single input by a group of potential users of a technology is usually analyzed in the literature using a “cooperative” approach. We provide an analysis for such economies by means of non-cooperative bargaining. Two bargaining models are analyzed, one based on demands the other on proposals. We show that the convexity of the production function implies that subgame perfect equilibrium outcomes of these bargaining games are coalition stable, (i.e., core outcomes). In the case of the proposal model, the equilibrium outcomes yield even a full characterization of the core. Journal of Economic Literature Classification Numbers C72, D21, D42.

Original languageAmerican English
Pages (from-to)202-220
Number of pages19
JournalJournal of Economic Theory
Volume64
Issue number1
DOIs
StatePublished - Oct 1994

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