Abstract
This paper examines an infinite horizon bargaining model, incorporating five features: two-sided incomplete information (with potentially information-revealing strategies), an infinite horizon, uncertainty concerning the potential gains from trade, an illumination of interesting qualitative bargaining issues, and plausible (free from arbitrarily specified out-of-equilibrium conjectures) equilibria. These features, motivated in the paper, have powerful implications. A Nash equilibrium exists, and is genetically both unique and sequential. Comparative static implications of variations in the game’s specifications are developed. We find that natural indications of bargaining strength emerge from the model, and establish the intuitive result that an increase in a player’s relative bargaining strength makes that player more likely to capture the gains from bargaining.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 193-208 |
| Number of pages | 16 |
| Journal | Review of Economic Studies |
| Volume | 54 |
| Issue number | 2 |
| DOIs | |
| State | Published - Jan 1 1987 |
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All Science Journal Classification (ASJC) codes
- Economics and Econometrics
Cite this
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Bargaining With Two-Sided Incomplete Information : An Infinite Horizon Model With Alternating Offers. / Chatterjee, Kalyan; Samuelson, Larry.
In: Review of Economic Studies, Vol. 54, No. 2, 01.01.1987, p. 193-208.Research output: Contribution to journal › Article
TY - JOUR
T1 - Bargaining With Two-Sided Incomplete Information
T2 - An Infinite Horizon Model With Alternating Offers
AU - Chatterjee, Kalyan
AU - Samuelson, Larry
PY - 1987/1/1
Y1 - 1987/1/1
N2 - This paper examines an infinite horizon bargaining model, incorporating five features: two-sided incomplete information (with potentially information-revealing strategies), an infinite horizon, uncertainty concerning the potential gains from trade, an illumination of interesting qualitative bargaining issues, and plausible (free from arbitrarily specified out-of-equilibrium conjectures) equilibria. These features, motivated in the paper, have powerful implications. A Nash equilibrium exists, and is genetically both unique and sequential. Comparative static implications of variations in the game’s specifications are developed. We find that natural indications of bargaining strength emerge from the model, and establish the intuitive result that an increase in a player’s relative bargaining strength makes that player more likely to capture the gains from bargaining.
AB - This paper examines an infinite horizon bargaining model, incorporating five features: two-sided incomplete information (with potentially information-revealing strategies), an infinite horizon, uncertainty concerning the potential gains from trade, an illumination of interesting qualitative bargaining issues, and plausible (free from arbitrarily specified out-of-equilibrium conjectures) equilibria. These features, motivated in the paper, have powerful implications. A Nash equilibrium exists, and is genetically both unique and sequential. Comparative static implications of variations in the game’s specifications are developed. We find that natural indications of bargaining strength emerge from the model, and establish the intuitive result that an increase in a player’s relative bargaining strength makes that player more likely to capture the gains from bargaining.
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UR - http://www.scopus.com/inward/citedby.url?scp=84930206792&partnerID=8YFLogxK
U2 - 10.2307/2297511
DO - 10.2307/2297511
M3 - Article
VL - 54
SP - 193
EP - 208
JO - Review of Economic Studies
JF - Review of Economic Studies
SN - 0034-6527
IS - 2
ER -