Commitment through Incomplete Information in a Simple Repeated Bargaining Game
This paper analyzes a finitely repeated bargaining game with asymmetric information. It gives a tight characterization of the equilibrium path and the equilibrium payoffs of all sequential equilibria satisfying a weak Markov property. The method used allows for arbitrarily many different types and provides an intuitive understanding of how \"reputation\" works. It is shown that the seller can use the incomplete information about his costs to credibly threaten never to accept a price lower than his highest possible costs before the very end of the game. The result holds for any discount factor of the seller greater than 0.5. Journal of Economic LiteratureClassification Numbers: C78, D83.
(This abstract was borrowed from another version of this item.)
When requesting a correction, please mention this item's handle: RePEc:eee:jetheo:v:60:y:1993:i:1:p:114-139. 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: (Dana Niculescu)
If references are entirely missing, you can add them using this form.