Perfect Equilibria in a Negotiation Model with Different Time Preferences

Harold Houba and Quan Wen ()

No 706, Vanderbilt University Department of Economics Working Papers from Vanderbilt University Department of Economics

Abstract: The players behave quite differently in the negotiation model under different time preferences than under common time preferences. Conventional analysis in this literature relies on the key presumption that all continuation payoffs are bounded from above by the bargaining frontier resulted from stationary contracts. When players have different time preferences, however, intertemporal trade may lead to continuation payoffs above the bargaining frontier. In this paper, we provide a thorough study of this problem when players have different time preferences. Our results tie up all the previous findings, and also clarify the confusion that arose in the past.

Keywords: Bargaining; negotiation; time preference; endogenous threats (search for similar items in EconPapers)
JEL-codes: C72 C73 C78 (search for similar items in EconPapers)
Date: 2006-03
New Economics Papers: this item is included in nep-gth
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http://www.accessecon.com/pubs/VUECON/vu07-w06.pdf Revised version, 2007 (application/pdf)

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Working Paper: Perfect Equilibria in a Negotiation Model with Different Time Preferences (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:van:wpaper:0706

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