Nash meets Rubinstein in final-offer arbitration

Muhamet Yildiz ()

Economics Letters, 2011, vol. 110, issue 3, 226-230

Abstract: I consider a final-offer arbitration model in which the offers are submitted sequentially, the parties are allowed to accept offers, and the arbitrator maximizes Nash's social welfare function. I show that backwards induction in this three-period model leads to the subgame-perfect equilibrium outcome of Rubinstein's infinite-horizon alternating-offer bargaining game.

Keywords: Nash; bargaining; Rubinstein; Bargaining; Final-offer; arbitration (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (7)

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