Efficient delays in a stochastic model of bargaining

Antonio Merlo and Charles Wilson
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Charles Wilson: Department of Economics, New York University, New York, NY 10003, USA

Economic Theory, 1997, vol. 11, issue 1, 39-55

Abstract: We consider a k-player sequential bargaining model in which both the cake size and the identity of the proposer are determined by a stochastic process. For the case where the cake is a simplex (of random size) and the players share a common discount factor, we establish the existence of a unique stationary subgame perfect payoff which is efficient and characterize the conditions under which agreement is delayed. We also investigate how the equilibrium payoffs depend on the order in which the players move and on the correlation between the identity of the proposer and the cake size.

JEL-codes: C73 C78 (search for similar items in EconPapers)
Date: 1997-11-17
Note: Received: November 5, 1996; revised version: December 31, 1996
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Citations: View citations in EconPapers (18)

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