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Rubinstein bargaining with two-sided outside options

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  • JÕzsef SÂkovics

    (Institut d'AnÁlisi EconÔmica , Campus UAB, E-08193 Bellaterra, SPAIN)

  • Clara PonsatÎ

    (CODE and Dept. d'Econ. i Hist. Econ., Universitat AutÔnoma de Barcelona, E-08193 Bellaterra, SPAIN)

Abstract

In this note we show that if in the standard Rubinstein model both players are allowed to leave the negotiation after a rejection, in which case they obtain a payoff of zero, then there exist a continuum of subgame-perfect equilibrium outcomes, including some which involve significant delay. We also fully characterize the case in which, upon quitting, the players can take an outside option of positive value.

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Bibliographic Info

Article provided by Springer in its journal Economic Theory.

Volume (Year): 11 (1998)
Issue (Month): 3 ()
Pages: 667-672

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Handle: RePEc:spr:joecth:v:11:y:1998:i:3:p:667-672

Note: Received: February 27, 1996; revised version: March 28, 1997
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Cited by:
  1. Ana Paula Martins, 2010. "Splitting Games: Nash Equilibrium and the Optimisation Problem," EERI Research Paper Series EERI_RP_2010_36, Economics and Econometrics Research Institute (EERI), Brussels.
  2. J. Atsu Amegashie, 2009. "Incomplete Property Rights and Overinvestment," CESifo Working Paper Series 2711, CESifo Group Munich.
  3. Li, Duozhe, 2011. "The power to delay," Economics Letters, Elsevier, vol. 112(2), pages 155-157, August.
  4. Clara Ponsati & József Sákovics, 2005. "Markets for professional services: queues and mediocrity," ESE Discussion Papers 133, Edinburgh School of Economics, University of Edinburgh.
  5. Clara Ponsati & Adamuz & Mercedes, 2004. "Arbitration Systems and Negotiations," Econometric Society 2004 Latin American Meetings 118, Econometric Society.
  6. Ester Camiña & Nicolás Porteiro, 2007. "The Role of Mediation in Peacemaking and Peacekeeping Negotiations," Working Papers 07.05, Universidad Pablo de Olavide, Department of Economics.
  7. KIbrIs, Özgür & TapkI, Ipek Gürsel, 2010. "Bargaining with nonanonymous disagreement: Monotonic rules," Games and Economic Behavior, Elsevier, vol. 68(1), pages 233-241, January.
  8. Kıbrıs, Özgür & Tapkı, İpek Gürsel, 2011. "Bargaining with nonanonymous disagreement: Decomposable rules," Mathematical Social Sciences, Elsevier, vol. 62(3), pages 151-161.
  9. Ponsati Clara, 2004. "Search and Bargaining in Large Markets With Homogeneous Traders," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 4(1), pages 1-27, February.
  10. Rong, Kang, 2012. "Alternating-offer games with final-offer arbitration," Games and Economic Behavior, Elsevier, vol. 76(2), pages 596-610.
  11. Ponsatí­, Clara & Sákovics, József, 2008. "Queues, not just mediocrity: Inefficiency in decentralized markets with vertical differentiation," International Journal of Industrial Organization, Elsevier, vol. 26(4), pages 998-1014, July.

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