Markov bargaining games
UNSPECIFIED. (1998) Markov bargaining games. JOURNAL OF ECONOMIC DYNAMICS & CONTROL, 22 (3). pp. 341-355. ISSN 0165-1889Full text not available from this repository.
I consider an alternating offer bargaining game which is played by a risk neutral buyer and seller, where the value of the good to be traded follows a Markov process. For these games the existence of a perfect equilibrium is proved and the set of equilibrium payoffs and strategies are characterised. The main results are (a) if the buyer is less patient than the seller, then there will be delays in the players reaching an agreement, the buyer is forced into a suboptimal consumption policy and the equilibrium is ex-ante inefficient, and (b) if the buyer is more patient than the seller, then there is a unique and efficient equilibrium where agreement is immediate. (C) 1998 Elsevier Science B.V. All rights reserved.
|Item Type:||Journal Article|
|Subjects:||H Social Sciences > HC Economic History and Conditions|
|Journal or Publication Title:||JOURNAL OF ECONOMIC DYNAMICS & CONTROL|
|Publisher:||ELSEVIER SCIENCE BV|
|Official Date:||March 1998|
|Number of Pages:||15|
|Page Range:||pp. 341-355|
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