Mediation and the Nash bargaining solution
AbstractThis paper analyzes a model of bargaining in which two parties use a mediator who sequentially makes random proposals until agreement by both parties is reached. I show that as the cost of delay shrinks to zero, the subgame perfect payoff converges to the asymmetric Nash bargaining solution with weights determined by the relative discount rates of the players. I also establish conditions for the uniqueness of the subgame perfect equilibrium for arbitrary discount rates.
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Bibliographic InfoArticle provided by Springer in its journal Review of Economic Design.
Volume (Year): 6 (2001)
Issue (Month): 3 ()
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Web page: http://link.springer.de/link/service/journals/10058/index.htm
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- Olivier Compte & Philippe Jehiel, 2010.
"Bargaining and Majority Rules: A Collective Search Perspective,"
Journal of Political Economy,
University of Chicago Press, vol. 118(2), pages 189-221, 04.
- Philippe Jehiel & Oliver Compte, 2007. "Bargaining and Majority Rules: A Collective Search Perspective," Levine's Bibliography 843644000000000131, UCLA Department of Economics.
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