Noncooperative Coalitional Bargaining with Generalized Selection of Proposers∗

This paper presents a noncooperative coalitional bargaining model with generalized selection of proposers, which includes Chatterjee et al.’s (1993) fixed-order-proposer model and Okada’s (1996) random-proposer model as two extreme special cases. In the model, at each round, proposers are selected according to recognition probabilities, which depend on who rejects a proposal at the previous round. This paper provides conditions for the subgame efficiency, which means that the grand coalition is formed and no delay occurs in every subgame, both with each discount factor δ < 1 and in the limit δ → 1. It is shown that for any discount factor δ < 1, the subgame efficiency is more difficultly achieved as each player is selected as a proposer with a higher probability after she rejects a proposal at the previous round, and in the limit δ → 1, the probability does not matter for the subgame efficiency.