This short paper demonstrates that the equilibrium payoffs of an alternating-offers bargaining game over a unit of surplus converge to equal division provided that the parties are allowed to bargain over all the surpluses generated by the "right" to be the first to make offers. The result obtained in the present paper may provide some "justification" for other division procedures such as the divide-and-choose or the moving-knife mechanisms.
Volume (Year): 30 (2010)
Issue (Month): 2 ()
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- Rubinstein, Ariel, 1991. "Comments on the Interpretation of Game Theory," Econometrica, Econometric Society, vol. 59(4), pages 909-24, July.
- Ariel Rubinstein, 2010.
"Perfect Equilibrium in a Bargaining Model,"
Levine's Working Paper Archive
252, David K. Levine.
- Perry Motty & Reny Philip J., 1993. "A Non-cooperative Bargaining Model with Strategically Timed Offers," Journal of Economic Theory, Elsevier, vol. 59(1), pages 50-77, February.
- Muthoo,Abhinay, 1999. "Bargaining Theory with Applications," Cambridge Books, Cambridge University Press, number 9780521576475, November.
- Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April.
- Chaim Fershtman, 1986.
"The Importance of the Agenda in Bargaining,"
689, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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