Efficiency Does Not Imply Immediate Agreement
Sergiu Hart and Zohar Levy
Gul (Econometrica 1989) introduces a non-cooperative bargaining
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.
Journal of Economic Literature Classification
Numbers: C71, C72, C78, D4
Econometrica 67 (1999), 4, 909-912