Efficiency Does Not Imply Immediate Agreement

Authors: 
Sergiu Hart & Zohar Levy
Abstract: 

Gul (1989) introduces a non-cooperative bargaining procedure and claims that the payoffs of the resulting efficient stationary subgame perfect equilibria are close to the Shapley value of the underlying transferable utility game (when the discount factor is close to 1). We exhibit here an example showing that efficiency, even for strictly super-additive games, does not imply that all meetings end in agreement. Thus efficiency does not suffice to get Gul's result.

Date: 
July, 1997
Published in: 
Econometrica 67 (1999), 909-912
Number: 
153