A Two-Person Repeated Bargaining Game with Long-Term Contracts

  • Akira Okada


Does a noncooperative equilibrium point necessarily lead to a Pareto efficient outcome in a supergame if binding agreements on actions are possible among players? We present a two-person repeated bargaining game in which players can negotiate for a long-term contract on their actions in the supergame model. We show that a subgame perfect equilibrium point of our game necessarily leads to a Pareto efficient outcome if the equilibrium strategies for both players have zero-memory. We also point out that the question above is answered negatively if the equilibrium strategies for players have complete memory.


Average Payoff Equilibrium Strategy Subgame Perfect Equilibrium Bargaining Game Noncooperative Game 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Aumann, R.J. (1981). Surveys of repeated games. In: Essays in Game Theory and Mathematical Economics in Honor of Oskar Morgenstern, Mannheim/Wien/Zürich: Bibliographisches Institut.Google Scholar
  2. Harsanyi, J.C. (1978). A solution theory for noncooperative games and its implications for cooperative games. In: P.C. Ordeshook (ed.), Game Theory and Political Science. New York: New York Univ. Press.Google Scholar
  3. Kaneko, M. (1982). Some remarks on the folk theorem in game theory. Math. Soc. Sci. 3: 281–290.Google Scholar
  4. Nash, J.F. (1951). Noncooperative games. Ann. Math. 54: 286–295.Google Scholar
  5. Rubinstein, A. (1979). Equilibrium in supergames with the overtaking criterion. J. con. Th. 21: 1–9.Google Scholar
  6. Selten, R. (1973). A simple model of imperfect competition, where 4 are few and 6 are many. Int. J. Game Th. 2: 141–201.Google Scholar
  7. Selten, R. (1975). Reexamination of the perfectness concept for equilibrium points in extensive games. Int. J. Game Th. 4: 25–55.Google Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 1991

Authors and Affiliations

  • Akira Okada

There are no affiliations available

Personalised recommendations