Majority bargaining for resource division

We address the problem of how a set of agents can decide to share a resource, represented as a unit-sized pie. The pie can be generated by the entire set but also by some of its subsets. We investigate a finite horizon non-cooperative bargaining game, in which the players take it in turns to make proposals on how the resource should for this purpose be allocated, and the other players vote on whether or not to accept the allocation. Voting is modelled as a Bayesian weighted voting game with uncertainty about the players’ weights. The agenda, (i.e., the order in which the players are called to make offers), is defined exogenously. We focus on impatient players with heterogeneous discount factors. In the case of a conflict, (i.e., no agreement by the deadline), no player receives anything. We provide a Bayesian subgame perfect equilibrium for the bargaining game and conduct an ex-ante analysis of the resulting outcome. We show that the equilibrium is unique, computable in polynomial time, results in an instant Pareto optimal outcome, and, under certain conditions provides a foundation for the core and also the nucleolus of the Bayesian voting game. In addition, our analysis leads to insights on how an individual’s bargained share is influenced by his position on the agenda. Finally, we show that, if the conflict point of the bargaining game changes, then the problem of determining the non-cooperative equilibrium becomes NP-hard even under the perfect information assumption. Our research also reveals how this change in conflict point impacts on the above mentioned results.