Sequential Bargaining in a Market with One Seller and Two Different Buyers
AbstractA matching and bargaining model in a market with one seller and two buyers, differing only in their reservation price, is analyzed. No subgame perfect equilibrium exists for stationary strategies. The authors demonstrate the existence of inefficient equilibria in which the low buyer receives the good with large probability, even as friction becomes negligible. They investigate the relationship between the use of Nash and sequential bargaining. Nash bargaining seems applicable only when the sequential approach yields a unique stationary strategy subgame perfect equilibrium.
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Bibliographic InfoPaper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number 89-22.
Length: 28 pages
Date of creation: Oct 1989
Date of revision:
Publication status: Published in: Games and Economic Behavior, 1991, 3(4) pp 453-66
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game theory; bargaining theory; matching;
Other versions of this item:
- Hendon, Ebbs & Tranaes, Torben, 1991. "Sequential bargaining in a market with one seller and two different buyers," Games and Economic Behavior, Elsevier, vol. 3(4), pages 453-466, November.
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
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- Sempere-Monerris, José J. & Vannetelbosch, Vincent J., 1997. "Bargaining with Externalities: Licensing of an Innovation," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1997007, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
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- : Ebbe Hendon & Birgitte Sloth & Torben Tranæs, 1993.
"Decentralized Trade with Bargaining and Voluntary Matching,"
93-08, University of Copenhagen. Department of Economics.
- Ebbe Hendon & Birgitte Sloth & Torben Tranæs, 1994. "Decentralized trade with bargaining and voluntary matching," Review of Economic Design, Springer, vol. 1(1), pages 55-77, December.
- Bård Harstad, 2013.
"The Market for Conservation and Other Hostages,"
CESifo Working Paper Series
4296, CESifo Group Munich.
- Chatterjee, Kalyan & Dutta, Bhaskar, 1998. "Rubinstein Auctions: On Competition for Bargaining Partners," Games and Economic Behavior, Elsevier, vol. 23(2), pages 119-145, May.
- Matteo Maria GALIZZI, 2006. "Gas thin markets:insights from bargaining and networks models," Departmental Working Papers 2006-12, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
- Charles J. Thomas, 2012. "An Alternating-Offers Model of Multilateral Negotiations," Working Papers 12-31, Chapman University, Economic Science Institute.
- Chatterjee, K. & Dutta, B., 1994. "Rubinstein auctions: On competition for bargaining partners," Discussion Paper 1994-57, Tilburg University, Center for Economic Research.
- Calvo-Armengol, Antoni, 1999. "A note on three-player noncooperative bargaining with restricted pairwise meetings," Economics Letters, Elsevier, vol. 65(1), pages 47-54, October.
- Björnerstedt, Jonas & Westermark, Andreas, 2009. "Stationary equilibria in bargaining with externalities," Games and Economic Behavior, Elsevier, vol. 65(2), pages 318-338, March.
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