A Non-cooperative Bargaining Theory with Incomplete Information: Verifiable Types
AbstractWe consider a non-cooperative two-person sequential bargaining game with incomplete information. Player types are verifiable when a con-tract is implemented. We show that there is no delay in agreements and the inscrutability principle holds under the property of independence of irrelevant types (IIT), whereby the response of every type of player is independent of proposals to other player types. We prove the existence of a stationary sequential equilibrium satisfying IIT and a self-selection property for every discount factor for future payoffs. We also show that the equilibrium proposal of every player converges to the ex post Nash bargaining solution as the discount factor goes to one.
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Bibliographic InfoPaper provided by Graduate School of Economics, Hitotsubashi University in its series Discussion Papers with number 2013-15.
Length: 40 p.
Date of creation: Dec 2013
Date of revision:
bargaining; incomplete information; mechanism selection; ex post Nash bargaining solution; non-cooperative games;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-12-29 (All new papers)
- NEP-CTA-2013-12-29 (Contract Theory & Applications)
- NEP-GTH-2013-12-29 (Game Theory)
- NEP-MIC-2013-12-29 (Microeconomics)
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