"Bargaining for Assembly " by Dhritiman Gupta | Shiv Nadar University
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"Bargaining for Assembly " by Dhritiman Gupta

Event Date: 
Friday, October 5, 2018 -

A buyer wants to purchase multiple contiguous items from sellers holding an item each. We refer to such situations as assembly problems. We model contiguity of items through graphs where each node represents an item and an edge between two nodes denotes physical adjacency. The buyer wants to purchase a path of a desired length, called a feasible path. A seller is critical if he lies on every feasible path. We investigate subgame perfect equilibria of an infinite horizon alternate-offer bargaining game between the buyer and the sellers. We show that the buyer can extract full surplus within two periods if the valuations of the sellers are symmetric and there are no critical sellers. Fur­ther, we show that if the valuations of the sellers are asymmetric, there does not exist any equilibria where the buyer extracts full surplus. Our paper thus brings out the role of complementarity in loca­tion and competition in valuation in assembly problems.

Friday 05, Oct 2018
12:30 PM - 01:30 PM