Social Sciences Brown Bag Seminar

The paper presents a model of decentralized bargaining between many buyers and many sellers. The model is non-cooperative, fully decentralized, and in Markov strategies. The main result identifies a necessary and sufficient condition for equilibrium efficiency. This condition is closely related to the Core of the economy, thereby connecting non-cooperative bargaining outcomes to the cooperative approach. Bargaining positions evolve endogenously in the game and can lead to both mismatch and delay. Mismatch is necessary for equilibrium delay.