Commitment and compromise in bargaining
This paper studies observable and irrevocable commitment in bargaining. We investigate when commitment tactics can cause an impasse and when compromise is feasible. In the static model in which a player's commitment decision is made simultaneously with his choice of bargaining stance, compromise becomes unattainable (Ellingsen and Miettinen, 2008). We first analyze a static bargaining model, in which the players decide whether to attempt commitment after announcing their demands. In contrast to the aforementioned strong result, our model accommodates both incompatible commitments and compromises as equilibrium outcomes. We then extend our analysis to a dynamic setting. It is shown that compromise is possible if the players can alter their demands quickly and the chances of successful commitment are low.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Muthoo, Abhinay, 1996.
"A Bargaining Model Based on the Commitment Tactic,"
Journal of Economic Theory,
Elsevier, vol. 69(1), pages 134-152, April.
- Muhamet Yildiz, 2003. "Bargaining without a Common Prior-An Immediate Agreement Theorem," Econometrica, Econometric Society, vol. 71(3), pages 793-811, 05.
- Chatterjee, K. & Samuelson, L., 1989.
"Perfect Equilibria In Simultaneous- Offers Bargaining,"
12-87-3, Pennsylvania State - Department of Economics.
- Chatterjee, Kalyan & Samuelson, Larry, 1990. "Perfect Equilibria in Simultaneous-Offers Bargaining," International Journal of Game Theory, Springer, vol. 19(3), pages 237-67.
- Kambe, Shinsuke, 1999. "Bargaining with Imperfect Commitment," Games and Economic Behavior, Elsevier, vol. 28(2), pages 217-237, August.
- Tore Ellingsen & Topi Miettinen, 2008. "Commitment and Conflict in Bilateral Bargaining," American Economic Review, American Economic Association, vol. 98(4), pages 1629-35, September.
- Crawford, Vincent P, 1982. "A Theory of Disagreement in Bargaining," Econometrica, Econometric Society, vol. 50(3), pages 607-37, May.
When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:77:y:2011:i:2:p:203-211. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.