A noncooperative theory of coalitional bargaining

We explore a sequential offers model of n-person coalitional bargaining with transferable utility and with time discounting. Our focus is on the efficiency properties of stationary equilibrium of strictly super additive games, when the discount factor is sufficiently large; we do, however, consider examples of other games where sub game perfectness alone is employed. It is shown that delay and the formation of inefficient sub coalitions can occur in equilibrium, the latter for some or all orders of proposer. However, efficient stationary equilibrium payoffs converge to a point in the core, as exist an efficient stationary equilibrium payoff vector for sufficiently high 8. This vector converges as f1 to the egalitarian allocation of Dutta and Ray (1989).