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Title:Patience and ultimatum in bargaining PDF Logo
Authors:Segendorff, Björn
Issue Date:2002
Series/Report no.:SSE/EFI Working Paper Series in Economics and Finance 461
Abstract:This study investigates in a two-stage two-player model how the decision to make an ultimatum and how much to demand depends on the impatience of the agents and the pie uncertainty. First, players simultaneously decide on their ultimatums. If the ultimatum(s) are compatible then the player(s) receive his (their) demand(s) in the second period and the eventually remaining player becomes residual claimant. If no ultimatums are made then there is a Rubinstein-Ståhl bargaining. Relative impatience induces ultimatums but does not affect the demanded amount. In a discrete (continuous) setting there exist no equilibrium without an ultimatum (with mutual ultimatums).
Subjects:Ultimatum
Bargaining
Patience
Rubinstein-Ståhl
JEL:C71
C72
Document Type:Working Paper
Appears in Collections:SSE/EFI Working Paper Series in Economics and Finance, EFI - The Economic Research Institute, Stockholm School of Economics

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