Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/197154
Authors: 
Anesi, Vincent
Duggan, John
Year of Publication: 
2018
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 13 [Year:] 2018 [Issue:] 2 [Pages:] 505-525
Abstract: 
This paper studies stationary Markov perfect equilibria in multidimensional models of dynamic bargaining, in which the alternative chosen in one period determines the status quo for the next. We generalize a sufficient condition for existence of equilibrium due to Anesi and Seidmann, 2015. We then use this existence result to show that if a weak gradient restriction holds at an alternative, then when players are sufficiently patient, there is a continuum of equilibria with absorbing sets arbitrarily close to that alternative. A sufficient condition for our gradient restriction is that the gradients of all players' utilities are linearly independent at that alternative. When the dimensionality of the set of alternatives is high, this linear independence condition holds at almost all alternatives, and equilibrium absorbing sets are dense in the set of alternatives. This implies that constructive techniques, which are common in the literature, fail to identify many plausible outcomes in dynamic bargaining games.
Subjects: 
Legislative bargaining
endogenous status quo
Markovian equilibrium
simple solution
JEL: 
C78
D71
D72
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/4.0/
Document Type: 
Article

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