Consistent Bargaining

Oz Shy

Economics Bulletin, 2010, vol. 30, issue 2, 1425-1432

Abstract: This short paper demonstrates that the equilibrium payoffs of an alternating-offers bargaining game over a unit of surplus converge to equal division provided that the parties are allowed to bargain over all the surpluses generated by the "right" to be the first to make offers. The result obtained in the present paper may provide some "justification" for other division procedures such as the divide-and-choose or the moving-knife mechanisms.

Keywords: Bargaining theory; Alternating offers; First-mover advantage; Equal division. (search for similar items in EconPapers)
JEL-codes: C7 (search for similar items in EconPapers)
Date: 2010-05-18
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