Stationarity, Rationalizability and Bargaining
AbstractWithout assuming rational expectations, the author examines the implications of a stationarity assumption in a standard bargaining model with one-sided incomplete information, where the seller makes an offer in each period. Instead of computing a weakly stationary equilibrium, the author invokes rationalizability combined with the restriction that the buyer's acceptance rule be weakly stationary. There exists a pair of rationalizable sets of pure strategies for the seller and the buyer that are weakly stationary. The author demonstrates that any initial offer from the seller induced by a strategy rationalized by a weakly stationary acceptance rule for the buyer must entail the Coase property. Copyright 1994 by The Review of Economic Studies Limited.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Review of Economic Studies.
Volume (Year): 61 (1994)
Issue (Month): 2 (April)
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- Vincent Vannetelbosch, 1999.
"Alternating-Offer Bargaining and Common Knowledge of Rationality,"
Theory and Decision,
Springer, vol. 47(2), pages 111-138, October.
- VANNETELBOSCH, Vincent J., . "Alternating-offer bargaining and common knowledge of rationality," CORE Discussion Papers RP -1432, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Shimoji, Makoto & Watson, Joel, 1998. "Conditional Dominance, Rationalizability, and Game Forms," Journal of Economic Theory, Elsevier, vol. 83(2), pages 161-195, December.
- In-Koo Cho, 2004. "Monotonicity and Rationalizability in Large Uniform Price and Double Auctions," Theory workshop papers 658612000000000076, UCLA Department of Economics.
- Pierpaolo Battigalli, 2004.
"Rationalization in Signaling Games: Theory and Applications,"
275, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Pierpaolo Battigalli, 2006. "Rationalization In Signaling Games: Theory And Applications," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 8(01), pages 67-93.
- Battigalli, Pierpaolo, 2003. "Rationalizability in infinite, dynamic games with incomplete information," Research in Economics, Elsevier, vol. 57(1), pages 1-38, March.
- Vannetelbosch, Vincent J., 1996. "On Rationalizability in Two-Person Alternating-Offer Bargaining," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1996023, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
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