Dynamic matching and bargaining with heterogeneous deadlines

Sjaak Hurkens and Nir Vulkan ()

International Journal of Game Theory, 2015, vol. 44, issue 3, 599-629

Abstract: This paper analyzes bargaining outcomes when agents do not have stationary time preferences (as represented by a constant discount factor) but are pressed by firm deadlines. We consider a dynamic model where traders with heterogeneous deadlines are matched randomly into pairs who then bargain about the division of a fixed surplus. A trader leaves the market when an agreement has been reached or when his deadline expires. Our analysis encompasses both the case of perfect and imperfect information about the partner’s deadline. We define, characterize and show the existence of a stationary equilibrium configuration. We characterize when delay occurs and when deadlines are missed in equilibrium and show that the payoffs of traders are strictly increasing and concave in own deadline, unless bargaining takes place under imperfect information and no delay occurs, in which case all pairs immediately agree on an almost even split. We provide comparative statics exercises and illustrate our results by some examples. Copyright Springer-Verlag Berlin Heidelberg 2015

Keywords: Bargaining; Deadlines; Markets; C73; C78 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1007/s00182-014-0446-6 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:jogath:v:44:y:2015:i:3:p:599-629

Ordering information: This journal article can be ordered from
http://www.springer. ... eory/journal/182/PS2

DOI: 10.1007/s00182-014-0446-6

Access Statistics for this article

International Journal of Game Theory is currently edited by Shmuel Zamir, Vijay Krishna and Bernhard von Stengel

More articles in International Journal of Game Theory from Springer, Game Theory Society
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().