On Rationalizability in Two-Person Alternating-Offer Bargaining

Vincent J. Vannetelbosch
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Vincent J. Vannetelbosch: UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES); UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE)

No 1996023, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: This paper reconsiders Rubinstein's alternating-offer bargaining game with complete information. We define rationalizability for multi-stage games with observed actions. Whe show that rationalizability does not exclude perpetual disagreement or delay. Then, we define trembling-hand rationalizability and we show that it implies a unique solution. Moreover, this unique solution is the subgame perfect equilibrium. We also reconsider an extension of Rubinstein's game wherein there is a smallest money unit.

Keywords: bargaining; alternating-offer; rationalizability; money unit (search for similar items in EconPapers)
JEL-codes: C72 C78 (search for similar items in EconPapers)
Pages: 16
Date: 1996-10-01
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:1996023

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