On Risk Aversion in the Rubinstein Bargaining Game

Emanuel Kohlscheen and S. A. O'Connell

No 269889, Economic Research Papers from University of Warwick - Department of Economics

Abstract: We derive closed-form solutions for the Rubinstein alternating offers game for cases where the two players have (possibly asymmetric) utility functions that belong to the HARA class and discount the future at a constant rate. We show that risk aversion may increase a bargainers payoff. This result - which contradicts Roth’s 1985 theorem tying greater risk neutrality to a smaller payoff - does not rely on imperfect information or departures from expected utility maximization.

Keywords: Agricultural and Food Policy; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 15
Date: 2008-10-10
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Citations: View citations in EconPapers (1)

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Working Paper: On Risk Aversion in the Rubinstein Bargaining Game (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwarer:269889

DOI: 10.22004/ag.econ.269889

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