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Malice and patience in Rubinstein bargaining

Brishti Guha

Research in Economics, 2019, vol. 73, issue 3, 264-270

Abstract: If two players playing a Rubinstein alternating offers game are highly malicious (getting a high utility from “malice” in every period when the other player does not obtain a share in a fixed pie), and highly patient, no equilibrium with an agreement exists and players choose perpetual disagreement. This does not change if the players are subjected to a known deadline after which the pie will be appropriated by outside agencies or disappear: perpetual disagreement is still the only outcome. If in addition players are required to pay endogenously determined fines if they fail to reach agreement, players with discount factors in a certain range do reach agreement, but only at the deadline. However, infinitely patient players would never reach agreement for any feasible level of one-time fines. The result contrasts with spiteful or envious preferences. Our results highlight a novel reason for failure to resolve property disputes.

Keywords: Malice; Patience; Rubinstein bargaining; Deadlines (search for similar items in EconPapers)
JEL-codes: C72 D91 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1016/j.rie.2019.07.006

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