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Uniqueness of stationary equilibrium payoffs in the Baron–Ferejohn model with risk‐averse players
Author(s) -
Eraslan Hülya
Publication year - 2016
Publication title -
international journal of economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 11
eISSN - 1742-7363
pISSN - 1742-7355
DOI - 10.1111/ijet.12078
Subject(s) - uniqueness , stochastic game , mathematical economics , economics , discounting , subgame perfect equilibrium , set (abstract data type) , econometrics , microeconomics , mathematics , nash equilibrium , computer science , mathematical analysis , finance , programming language
I study a multilateral sequential bargaining model among risk‐averse players in which the players may differ in their probability of being selected as the proposer and the rate at which they discount future payoffs. For games in which agreement requires less than unanimous consent, I characterize the set of stationary subgame perfect equilibrium payoffs. With this characterization, I establish the uniqueness of the equilibrium payoffs. For the case where the players have the same discount factor, I show that the payoff to a player is non‐decreasing in his probability of being selected as the proposer. For the case where the players have the same probability of being selected as the proposer, I show that the payoff to a player is non‐decreasing in his discount factor. This generalizes earlier work by allowing the players to be risk averse.