Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/197166 
Authors: 
Year of Publication: 
2018
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 13 [Issue:] 2 [Publisher:] The Econometric Society [Place:] New Haven, CT [Year:] 2018 [Pages:] 869-931
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
In this study, I examine the alternating-offer bilateral bargaining model with private correlated values. The correlation of values is modeled via the global games information structure. I focus on the double limits of perfect Bayesian equilibria as offers become frequent and the correlation approaches perfect. I characterize the Pareto frontier of the double limits and show that it is efficient, but the surplus split generally differs from the Nash bargaining split. I then construct a double limit that approximates the Nash bargaining split in the ex post surplus, but with a delay. Further, I prove the folk theorem when the range of the buyer's values coincides with the range of the seller's costs: any feasible and individually rational ex ante payoff profile can be approximated by a double limit.
Subjects: 
Bargaining delay
alternating offers
incomplete information
private correlated values
Coase conjecture
global games
JEL: 
C78
D82
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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