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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- 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.
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- : Ebbe Hendon & Birgitte Sloth & Torben Tranæs, 1993. "Decentralized Trade with Bargaining and Voluntary Matching," Discussion Papers 93-08, University of Copenhagen. Department of Economics.
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"The Market for Conservation and Other Hostages,"
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- Chatterjee, Kalyan & Dutta, Bhaskar, 2006. "Markets with Bilateral Bargaining and Incomplete Information," The Warwick Economics Research Paper Series (TWERPS) 762, University of Warwick, Department of Economics.
- 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.
- Mitsutoshi M. Adachi, 1998. "A note on frictions in the Bazaar type bargaining game," Investigaciones Economicas, Fundación SEPI, vol. 22(2), pages 293-304, May.
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