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American Economic Review: Vol. 101 No. 5 (August 2011)
AER Volume. 101, Issue 5 | 
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Bargaining in Stationary Networks
Article Citation
Manea, Mihai. 2011. "Bargaining in Stationary Networks."
American Economic Review,
101(5): 2042-80.
DOI: 10.1257/aer.101.5.2042
DOI: 10.1257/aer.101.5.2042
Abstract
We study an infinite horizon game in which pairs of players connected in a network are randomly matched to bargain. Players who reach agreement are replaced by new players at the same positions in the network. We show that all equilibria are payoff equivalent. The payoffs and the set of agreement links converge as players become
patient. Several new concepts—mutually estranged sets, partners, and shortage ratios—provide insights into the relative strengths of the positions in the network. We develop a procedure to determine the limit equilibrium payoffs for all players. Characterizations
of equitable and nondiscriminatory networks are also obtained. (JEL C78, D85)
Article Full-Text Access
Full-text Article
Additional Materials
Online Appendix (178.64 KB)
Authors
Manea, Mihai (MIT)
JEL Classifications
C78: Bargaining Theory; Matching Theory
D85: Network Formation and Analysis: Theory
D85: Network Formation and Analysis: Theory
