The Balanced Threat Agreement for Individual Externality Negotiation Problems

Peter Borm; Yukihiko Funaki; Yuan Ju

doi:10.1007/s41412-020-00097-7

The Balanced Threat Agreement for Individual Externality Negotiation Problems

Peter Borm, Yukihiko Funaki, Yuan Ju

Economics

Research output: Contribution to journal › Article › peer-review

Abstract

This paper introduces a model to analyze individual externalities and the associated negotiation problem, which has been largely neglected in the game theoretic literature. Following an axiomatic perspective, we propose a solution, as a payoff sharing scheme, called the balanced threat agreement, for such problems. It highlights an agent’s potential influences on all agents by threatening to enter or quit. We further study the solution by investigating its consistency. We also offer a discussion on the related stability issue.

Original language	English
Pages (from-to)	1-19
Number of pages	19
Journal	Homo Oeconomicus
Volume	37
Issue number	1-2
DOIs	https://doi.org/10.1007/s41412-020-00097-7
Publication status	Published - 28 May 2020

Bibliographical note

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10.1007_s41412-020-00097-7Final published version, 1.73 MBLicence: CC BY

Cite this

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