NOW OR LATER? - An Analysis of the Timing of Threats in Bargaining

Siegfried K. Berninghaus and Werner Güth ()

Papers on Strategic Interaction from Max Planck Institute of Economics, Strategic Interaction Group

Abstract: The variable threat-bargaining model of Nash (1953) assumes that threats in the sense of binding commitments as to what one will do if bargaining ends in conflict, are chosen before bargaining. By comparision, late threats to be chosen after bargaining end in conflict, appear more natural and would be self-enforcing, i.e., require no commitment power. Instead of exogenously imposing the timing of threats, they are derived endogenously as in indirect evolution or endogenous timing. Based on a duopoly market, we first derive the equilibrium for all possible constellations regarding the timing of threats. From these results we can show that the evolutionary analysis surprisingly justifies the early timing of threats as suggested by Nash (1953).

Keywords: Cooperative Bargaining; Thread Points in Bargaining; Timing of Decisions (search for similar items in EconPapers)
JEL-codes: C71 D43 D74 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2002-08
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
ftp://papers.econ.mpg.de/esi/discussionpapers/2002-38.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Failed to connect to FTP server papers.econ.mpg.de: No such host is known.

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:esi:discus:2002-38

Ordering information: This working paper can be ordered from
http://www.econ.mpg. ... arch/ESI/discuss.php

Access Statistics for this paper

More papers in Papers on Strategic Interaction from Max Planck Institute of Economics, Strategic Interaction Group Contact information at EDIRC.
Bibliographic data for series maintained by Karin Richter ( this e-mail address is bad, please contact ).