TIME INCONSISTENCY AND LEARNING IN BARGAINING GAMES
Zafer Akin ()
Game Theory and Information from University Library of Munich, Germany
The literature on time-inconsistent preferences introduced naive, partially naive and sophisticated as types of agents that represent different levels of unawareness of agents' self-control problems. This paper incorporates time-inconsistent players in a sequential bargaining model. We first consider 'naive' agents who never learn about their types and show that bargaining between such a player and a standard exponential agent ends in immediate agreement. The more naive a player, the higher his share. If naive agents can learn their type over time, we show that there is a critical date such that there is no agreement before that date. Hence, existence of time-inconsistent players who can learn as they play the game can be another explanation for delays in bargaining.
Keywords: Hyperbolic discounting; learning; bargaining; delay (search for similar items in EconPapers)
JEL-codes: C7 D8 (search for similar items in EconPapers)
Pages: 40 pages
Note: Type of Document - pdf; pages: 40
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Journal Article: Time inconsistency and learning in bargaining games (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpga:0507003
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