Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86576
Authors: 
Houba, Harold
Wen, Quan
Year of Publication: 
2007
Series/Report no.: 
Tinbergen Institute Discussion Paper 07-070/1
Abstract: 
We study a bargaining model with a disagreement game between offers and counteroffers. In order to characterize the set of its subgame perfect equilibrium payoffs, we provide a recursive technique that relies on the Pareto frontier of equilibrium payoffs. When players have different time preferences, reaching an immediate agreement may not be Pareto efficient. The recursive technique developed in this paper generalizes that of Shaked and Sutton (1984) by incorporating the possibility of making unacceptable proposals into the backward induction analysis. Results from this paper extend all the previous findings and resolve some open issues in the current literature.
Subjects: 
Bargaining
negotiation
time preference
endogenous threats
JEL: 
C72
C73
C78
Document Type: 
Working Paper

Files in This Item:
File
Size
282.51 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.