Bilateral Bargaining in Networks

Arnold Polanski

Research output: Contribution to journalArticlepeer-review

22 Citations (Scopus)


Each connected pair of nodes in a network can jointly produce one unit of surplus. A maximum number of linked nodes is selected in every period to bargain bilaterally over the division of the surplus, according to the protocol proposed by Rubinstein and Wolinsky (Econometrica 53 (1985), 1133-1150). All pairs, that reach an agreement, obtain the (discounted) payoffs and are removed from the network. This bargaining game has a unique subgame perfect equilibrium that induces the Dulmage-Mendelsohn decomposition (partition) of the bipartite network (of the set of nodes in this network).
Original languageEnglish
Pages (from-to)557-565
Number of pages9
JournalJournal of Economic Theory
Issue number1
Publication statusPublished - May 2007

ASJC Scopus subject areas

  • Economics and Econometrics

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