Inefficient Bargaining Deals Harm Society, Externalities Crucial
The article discusses how external factors can lead to inefficiency in bargaining situations among multiple players. The researchers show that in some cases, the way players choose to form coalitions can result in outcomes that are not optimal. They highlight that existing solutions for profit sharing often assume efficiency, but this may not always be the case in reality. The study presents examples of four-player scenarios where the distribution of profits can be inefficient, especially when externalities are involved. The findings suggest that considering external factors and individual player preferences in bargaining situations is crucial for achieving efficiency.