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Multilateral Bargaining with Discrete Surplus

Maurya, Amit Kumar (2015): Multilateral Bargaining with Discrete Surplus.

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Abstract

Krishna and Serrano (1996) show a unique and efficient outcome in a model of multilateral bargaining. We show that the predictability of the model critically depends on the nature of the surplus i.e. whether it is continuous or discrete. We show that the model suffers from multiple equilibria and severe inefficiency when the surplus is discrete, not continuous as assumed in Krishna and Serrano (1996), and players are patient enough.

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