Bargaining over Contingent Contracts under Incomplete Information

Geoffroy de Clippel, Jack Fanning and Kareen Rozen

American Economic Review, 2022, vol. 112, issue 5, 1522-54

Abstract: We study bargaining over contingent contracts in problems where private information becomes public or verifiable when the time comes to implement the agreement. We suggest a simple, two-stage game that incorporates important aspects of bargaining. We characterize equilibria in which parties always reach agreement, and study their limits as bargaining frictions vanish. Under mild regularity conditions, we show all interim-efficient limits belong to Myerson's (1984) axiomatic solution. Furthermore, all limits must be interim efficient if equilibrium beliefs satisfy no-signaling-what-you-don't-know. Results extend to other bargaining protocols.

JEL-codes: C78 D82 D83 D86 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Working Paper: Bargaining over Contingent Contracts Under Incomplete Information (2020)
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DOI: 10.1257/aer.20201026

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