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Bargaining With Commitment Under An Uncertain Deadline

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Author Info
VICENT CALABUIG (University of Valencia, Campus dels Tarongers. Av/dels Tarongers s/n, Edifici Departamental Oriental, 46022 Valencia, Spain)
ANTONI CUNYAT (University of Valencia, Campus dels Tarongers. Av/dels Tarongers s/n, Edifici Departamental Oriental, 46022 Valencia, Spain)
GONZALO OLCINA () (University of Valencia, Campus dels Tarongers. Av/dels Tarongers s/n, Edifici Departamental Oriental, 46022 Valencia, Spain)

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Abstract

We consider an infinite horizon bargaining game in which a deadline can arise with positive probability and where players possess an endogenous commitment device. We show that for any truncation of the game, the equilibrium agreement can only take place if the deadline arises within this finite horizon. Since the deadline is an uncertain event, the equilibrium exhibits agreements which are delayed with positive probability.

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Publisher Info
Article provided by World Scientific Publishing Co. Pte. Ltd. in its journal International Game Theory Review.

Volume (Year): 08 (2006)
Issue (Month): 04 ()
Pages: 525-532
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Handle: RePEc:wsi:igtrxx:v:08:y:2006:i:04:p:525-532

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Related research
Keywords: Bargaining; endogenous commitment; delays; uncertain deadline; JEL Classification: C78;

Find related papers by JEL classification:
B4 - Schools of Economic Thought and Methodology - - Economic Methodology
C0 - Mathematical and Quantitative Methods - - General
C6 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming
C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
D5 - Microeconomics - - General Equilibrium and Disequilibrium
D7 - Microeconomics - - Analysis of Collective Decision-Making
M2 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics

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