Time-Preference Heterogeneity and Multiplicity of Equilibria in Two-Group Bargaining

Daniel Cardona and Antoni Rubí-Barceló ()

Games, 2016, vol. 7, issue 2, 1-17

Abstract: We consider a multilateral bargaining game in which the agents can be classified into two groups according to their instantaneous preferences. In one of these groups there is one agent with a different discount factor. We analyze how this time-preference heterogeneity may generate multiplicity of equilibria. When such an agent is sufficiently more patient than the rest, there is an equilibrium in which her group-mates make the same proposal as the members of the other group. Thus, in heterogeneous groups the presence of more patient members may reduce the utility of its members.

Keywords: multilateral bargaining; one-dimensional; multiple equilibria; time preference; C78 (search for similar items in EconPapers)
JEL-codes: C C7 C70 C71 C72 C73 (search for similar items in EconPapers)
Date: 2016
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