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Risk Aversion and the Relationship between Nash's Solution and Subgame Perfect Equilibrium of Sequential Bargaining

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Author Info
Roth, Alvin E

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Abstract

This article presents some new, intuitive derivations of several results in the bargaining literatrue. These new derivations clarify the relationshps among these results and allow them to be understood in a unified way. These results concern the way in which the risk posture of the bargainers affects the outcome of bargaining as predicted by Nash's (axiomatic) solution of a static bargaining model (Nash, 1950) and by the subgame perfect equilibrium of the infinite horizon sequential bargaining game analyzed by Rubinstein (1982). The analogous, experimentally testable predictions for finite horizon sequential bargaining games are also presented. Copyright 1989 by Kluwer Academic Publishers

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Publisher Info
Article provided by Springer in its journal Journal of Risk and Uncertainty.

Volume (Year): 2 (1989)
Issue (Month): 4 (December)
Pages: 353-65
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Handle: RePEc:kap:jrisku:v:2:y:1989:i:4:p:353-65

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  1. Oscar Volij, 1999. "On Risk Aversion and Bargaining Outcomes," Economic theory and game theory 010, Oscar Volij. [Downloadable!]
  2. Kohlscheen, Emanuel & O’Connell, Stephen, 2008. "On Risk Aversion in the Rubinstein Bargaining Game," The Warwick Economics Research Paper Series (TWERPS) 878, University of Warwick, Department of Economics. [Downloadable!]
  3. White, Lucy, 2006. "Prudence in Bargaining: The Effect of Uncertainty on Bargaining Outcomes," CEPR Discussion Papers 5822, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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This page was last updated on 2009-12-4.


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