Unique Inneficient Perfect Equilibrium in a Stochastic Model of Bargaining with Complete Information
Taiji Furusawa () and
Quan Wen ()
No 121, Vanderbilt University Department of Economics Working Papers from Vanderbilt University Department of Economics
We consider a two-player strategic bargaining model with discounting in which (i) the interim disagreement point in each period is stochastically determined at the beginning of the period, and (ii) the proposing player can delay in making an offer. Unlike many other bargaining models of complete information, in which inefficient perfect equilibrium outcomes are caused by the multiplicity of perfect equilibrium outcomes, our model has a unique perfect equilibrium payoff in most of the cases. For some parameter values, the perfect equilibrium is inefficient since it has a stochastically delayed agreement. We show that both (i) and (ii) are also necessary for the unique inefficient equilibrium outcome in our model.
Keywords: Negotiation; stochastic interim disagreement point; delay (search for similar items in EconPapers)
JEL-codes: C72 C73 C78 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://www.accessecon.com/pubs/VUECON/vu01-w21.pdf First version, 2001 (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:van:wpaper:0121
Access Statistics for this paper
More papers in Vanderbilt University Department of Economics Working Papers from Vanderbilt University Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by John P. Conley ().