Bargaining with an Endogenous Deadline

Vincent J. Vannetelbosch
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Vincent J. Vannetelbosch: UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES); UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE)

No 1996011, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: We study a sequential bargaining game with a deadline from which the size of the cake decays. Two bargaining procedures are considered: a model with alternating-offers and a model with iterated simultaneous demands. We show that the bargaining game with alternating-offers has a unique SPE outcome, while the game with iterated demands possesses a unique Pareto robust-SPE outcome. Then, we endogenize the choice of the deadline: the bargaining game with alternating-offers is characterized by a deadline effect, whereas the other game is not. That is, once we endogenize the deadline, the occurrence of a deadline effect depends on the bargaining procedure used. But as the bargaining period goes to zero, the unique SPE outcome of the game with alternating-offers approaches the unique Pareto robust-SPE outcome of the game with iterated demands.

Keywords: Bargaining; endogenous deadline; alternating-offers; iterated demands (search for similar items in EconPapers)
JEL-codes: C72 (search for similar items in EconPapers)
Pages: 27
Date: 1996-02-01
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Working Paper: Bargaining with Endogenous Deadlines (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:1996011

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