A Noncooperative Coalitional Bargaining Game with Random Proposers

Abstract We extend the Stahl/Rubinstein's alternating-offer model ton-person coalitional bargaining. The key feature of the model is the random selection of proposers at every round. No delay of agreement occurs in equilibrium for a super-additive game, in contrast to the fixed-order model of Chatterjeeet al. (Rev. Econ. Stud.60, 1993, 463–477). When the discount factor of future payoffs is sufficiently high, the agreement on the grand coalition is reached if and only if it has the largest value per capita among all coalitions. Moreover, in the limit as the discount factor goes to one, all players divide equally the value of the grand coalition, regardless of who makes a proposal.Journal of Economic LiteratureClassification Numbers: C72, C73, C78.