Bargaining and rent seeking: Asymmetric equilibria with two investment levels

Haruo Imai

Economics Letters, 2024, vol. 240, issue C

Abstract: We consider a Baron–Ferejon-type bargaining model with recognition probabilities determined by a Tullock contest. The contest is conducted once-and-for-all before bargaining a la Yildirim (2010). It is known that for ex-ante symmetric players, there are no symmetric stationary subgame perfect equilibria (SSPE) in pure investment strategies. Here, we show the existence of an asymmetric SSPE, when players are sufficiently patient.

Keywords: Bargaining; Rent-seeking; SSPE (search for similar items in EconPapers)
JEL-codes: C72 C78 D70 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:240:y:2024:i:c:s016517652400260x

DOI: 10.1016/j.econlet.2024.111776

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