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Commitment and Conflict in Bilateral Bargaining

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  • Tore Ellingsen
  • Topi Miettinen

Abstract

Building on previous work by Schelling and Crawford, we study a model of bilateral bargaining in which negotiators can make binding commitments at a low positive cost c. Most of our results concern outcomes that survive iterated strict dominance. If commitment attempts never fail, there are three such outcomes. In two of them, all the surplus goes to one player. In the third, there is a high probability of conflict. If commitment attempts succeed with probability q

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.98.4.1629
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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 98 (2008)
Issue (Month): 4 (September)
Pages: 1629-35

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Handle: RePEc:aea:aecrev:v:98:y:2008:i:4:p:1629-35

Note: DOI: 10.1257/aer.98.4.1629
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Cited by:
  1. Li, Duozhe, 2011. "Commitment and compromise in bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 77(2), pages 203-211, February.
  2. Dutta, Rohan, 2012. "Bargaining with revoking costs," Games and Economic Behavior, Elsevier, vol. 74(1), pages 144-153.
  3. David Malueg, 2010. "Mixed-strategy equilibria in the Nash Demand Game," Economic Theory, Springer, vol. 44(2), pages 243-270, August.
  4. Ellingsen, Tore & Paltseva, Elena, 2012. "The private provision of excludable public goods: An inefficiency result," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 658-669.
  5. Britz, Volker, 2013. "Optimal value commitment in bilateral bargaining," Games and Economic Behavior, Elsevier, vol. 77(1), pages 345-351.

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