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Costless delay in negotiations
- Source :
- Economic Theory, 74(1), 69-93. Springer Verlag, Economic Theory, 74(1), 69-93. Springer New York, Herings, P J J & Houba, H 2022, ' Costless delay in negotiations ', Economic Theory, vol. 74, no. 1, pp. 69-93 . https://doi.org/10.1007/s00199-021-01373-6
- Publication Year :
- 2022
-
Abstract
- We study bargaining models in discrete time with a finite number of players, stochastic selection of the proposing player, endogenously determined sets and orders of responders, and a finite set of feasible alternatives. The standard optimality conditions and system of recursive equations may not be sufficient for the existence of a subgame perfect equilibrium in stationary strategies (SSPE) in case of costless delay. We present a characterization of SSPE that is valid for both costly and costless delay. We address the relationship between an SSPE under costless delay and the limit of SSPEs under vanishing costly delay. An SSPE always exists when delay is costly, but not necessarily so under costless delay, even when mixed strategies are allowed for. This is surprising as a quasi SSPE, a solution to the optimality conditions and the system of recursive equations, always exists. The problem is caused by the potential singularity of the system of recursive equations, which is intimately related to the possibility of perpetual disagreement in the bargaining process.
- Subjects :
- Economics and Econometrics
Computer science
media_common.quotation_subject
Costless delay
Existence
Stochastic and Dynamic Games
Evolutionary Games
Repeated Games
Subgame perfect equilibrium
Singularity
c73 - "Stochastic and Dynamic Games
Repeated Games"
c72 - Noncooperative Games
0502 economics and business
2-PLAYER STOCHASTIC GAMES
Limit (mathematics)
Bargaining Theory
Matching Theory
050207 economics
Finite set
media_common
05 social sciences
Stationary strategies
BARGAINING MODEL
Bargaining process
Negotiation
Discrete time and continuous time
Bargaining
050206 economic theory
PERFECT EQUILIBRIUM
Noncooperative Games
Mathematical economics
c78 - "Bargaining Theory
Matching Theory"
Subjects
Details
- Language :
- English
- ISSN :
- 09382259
- Volume :
- 74
- Issue :
- 1
- Database :
- OpenAIRE
- Journal :
- Economic Theory
- Accession number :
- edsair.doi.dedup.....733743b9f118af731ce0075b8b27b7ac