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On bargaining partner selection when communication is restricted

Antoni Calvó-Armengol

International Journal of Game Theory, 2002, vol. 30, issue 4, 503-515

Abstract: This paper analyzes the optimal selection of a bargaining partner when communication among players is restricted by an exogenously given graph. If players are equally patient, bargaining agreements are immune to players' locations, and the selection of a bargaining partner is not an issue. In contrast, when players differ in their discount factors, both location and impatience matter for bilateral agreements and partner selection becomes an issue. We show that selecting the most impatient neighbor is an equilibrium strategy whenever two players having a common neighbor share their most impatient neighbor. This condition is always satisfied by stratified graphs with no more than three strata. In the absence of this condition, cyclically-stratified graphs with no more than three strata also admit this equilibrium selection rule.

Keywords: Noncooperative; bargaining; ·; bargaining; partner; ·; communication; network; ·; time; preferences. (search for similar items in EconPapers)
JEL-codes: C72 C78 D20 (search for similar items in EconPapers)
Date: 2002-05-27
Note: Received: November 2000/Final version: January 2002
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