A Simple Bargaining Model where Parties Make Errors

Matthew Van Essen

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, we develop a bargaining model where parties (or their intermediaries) make errors when reporting their bid. We characterize the Nash equilibria of the game and show that there is a unique equilibrium where trade takes place. This trade equilibrium is shown to converge to the Nash Bargaining Solution of the problem as trembles diminish. Finally, we discuss our results in the context of the previous literature providing a critique of the model and analysis found in Carlsson (1991).

Keywords: Nash Program; Nash Bargaining Solution; Equilibrium Selection; Nash Demand Game (search for similar items in EconPapers)
JEL-codes: C7 C71 C72 C78 (search for similar items in EconPapers)
Date: 2014-09-28
New Economics Papers: this item is included in nep-gth, nep-hpe and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:58952

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