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. This paper is a revised version of Kawamori (2006). The author is grateful to the editor, William Thomson, the associate editor, an anonymous referee, Hiroaki Ino, Minoru Kitahara, Toshihiro Matsumura, Toshiji Miyakawa, Akira Okada, Masahiro Okuno-Fujiwara, Dan Sasaki, Tadashi Sekiguchi, Kazuo Yamaguchi, and the seminar participants at the 2006 Spring Meeting of the Japanese Economic Association for their valuable comments and suggestions. The author gratefully acknowledges the Japan Society for the Promotion of Science (JSPS) Research Fellowship for Young Scientists and the Grant-in-Aid for JSPS Fellows.