Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86368
Authors: 
Houba, Harold
Wen, Quan
Year of Publication: 
2006
Series/Report no.: 
Tinbergen Institute Discussion Paper 06-028/1
Abstract: 
There has been a long debate on equilibrium characterization in the negotiation model when players have different time preferences. We show that players behave quite differently under different time preferences than under common time preferences. Conventional analysis in this literature relies on the key assumption that all continuation payoffs are bounded from above by the bargaining frontier. However, when players have different time preferences, intertemporal trade may lead to continuation payoffs above the bargaining frontier. We provide a thorough study of this problem without imposing the conventional assumption. Our results tie up all the previous findings, and also clarify the controversies that arose in the past.
Subjects: 
Bargaining
Negotiation
Time Preference
Endogenous Threats
JEL: 
C72
C73
C78
Document Type: 
Working Paper

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