A noncooperative bargaining game with endogenous protocol and partial breakdown

Abstract

In this paper, we present a noncooperative sequential bargaining game with transferable utility. Instead of assuming exogenous protocol or random-proposer recognition, we provide a mechanism in which the protocol is generated endogenously. Besides, a partial breakdown probability is considered rather than a discount factor when the proposal is rejected by some player. We show that for each partial breakdown probability, stationary subgame perfect equilibria exist if the characteristic function game is totally balanced. Moreover, the outcomes of stationary subgame perfect equilibria in our model coincide with the core allocations.