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Alternating Bid Bargaining With A Smallest Money Unit

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Author Info

  • VAN DAMME, E.
  • SELTEN, R.
  • WINTER, E.

Abstract

In a seminal paper, Ariel Rubinstein has shown that impatience implies determinateness of the 2-person bargaining problem. In this note we show that this result depends also on the assumption that the set of alternatives is a continuum. If the pie can be divided only in finitely many different ways, (for example, because the pie is an amount of money and there is a smallest money unit), any partition can be obtained as the result of a subgame perfect equilibrium if the time interval between successive offers is sufficiently small.

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Bibliographic Info

Paper provided by Tilburg - Center for Economic Research in its series Papers with number 8932.

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Length: 15 pages
Date of creation: 1989
Date of revision:
Handle: RePEc:fth:tilbur:8932

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Postal: TILBURG UNIVERSITY, CENTER FOR ECONOMIC RESEARCH, 5000 LE TILBURG THE NETHERLANDS.
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Related research

Keywords: bargaining ; economic models ; game theory;

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  1. Ariel Rubinstein, 2010. "Perfect Equilibrium in a Bargaining Model," Levine's Working Paper Archive 252, David K. Levine.
  2. Shaked, Avner & Sutton, John, 1984. "Involuntary Unemployment as a Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 52(6), pages 1351-64, November.
  3. Sobel, Joel & Takahashi, Ichiro, 1983. "A Multistage Model of Bargaining," Review of Economic Studies, Wiley Blackwell, vol. 50(3), pages 411-26, July.
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