Trading bargaining weights
We consider a model, in which two agents are engaged in two separate bargaining problems. We
introduce a notion of bargaining weights (bargaining power), which is basically given by asymmetric
versions of the Perlesâ€“Maschler bargaining solution. Thereby, we view bargaining power as ordinary
goods that can be traded in an exchange economy.With equal initial endowment of bargaining power
there exists aWalrasian equilibrium in this exchange economy such that the utility allocation in equilibrium
coincides with the Perlesâ€“Maschler bargaining solution of the aggregate bargaining problem.
Equilibrium prices are given by the primitives of the two bargaining problems.
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983-993
983-993
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