BARGAINING WITH COMMITMENT UNDER AN UNCERTAIN DEADLINE

Vicent Calabuig, Antoni Cunyat () and Gonzalo Olcina ()
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Vicent Calabuig: University of Valencia, Campus dels Tarongers. Av/dels Tarongers s/n, Edifici Departamental Oriental, 46022 Valencia, Spain

International Game Theory Review (IGTR), 2006, vol. 08, issue 04, 525-532

Abstract: We consider an infinite horizon bargaining game in which a deadline can arise with positive probability and where players possess an endogenous commitment device. We show that for any truncation of the game, the equilibrium agreement can only take place if the deadline arises within this finite horizon. Since the deadline is an uncertain event, the equilibrium exhibits agreements which are delayed with positive probability.

Keywords: Bargaining; endogenous commitment; delays; uncertain deadline; JEL Classification: C78 (search for similar items in EconPapers)
JEL-codes: B4 C0 C6 C7 D5 D7 M2 (search for similar items in EconPapers)
Date: 2006
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DOI: 10.1142/S0219198906001089

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