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Patience in repeated bargaining: Revisiting Muthoo (1999)

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  • Zapal, Jan

Abstract

The paper shows that Corollary 10.3 in Muthoo’s book Bargaining Theory with Applications (Cambridge University Press, 1999) is incorrect and proves that patience increases a player’s equilibrium share in repeated bargaining situations. It clarifies why a tempting strategy of proof – replacing terms of an expression by approximations with identical limits, then doing comparative statics or taking limits – is flawed and will yield wrong conclusions in other contexts as well.

Suggested Citation

  • Zapal, Jan, 2018. "Patience in repeated bargaining: Revisiting Muthoo (1999)," Journal of Mathematical Economics, Elsevier, vol. 75(C), pages 150-153.
    • Handle: RePEc:eee:mateco:v:75:y:2018:i:c:p:150-153
    DOI: 10.1016/j.jmateco.2018.01.007
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    References listed on IDEAS

    as
    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. Muthoo Abhinay, 1995. "Bargaining in a Long-Term Relationship with Endogenous Termination," Journal of Economic Theory, Elsevier, vol. 66(2), pages 590-598, August.
    3. Muthoo,Abhinay, 1999. "Bargaining Theory with Applications," Cambridge Books, Cambridge University Press, number 9780521576475.
    4. Knabe, Andreas, 2009. "Implementing endogenous inside options in Nash wage bargaining models," Mathematical Social Sciences, Elsevier, vol. 57(2), pages 161-176, March.
    5. Rosenkranz, Stephanie & Schmitz, Patrick W., 2002. "Book Review of “Bargaining Theory with Applications” (Muthoo, 1999)," MPRA Paper 6973, University Library of Munich, Germany.
    6. Eberwein, Curtis J., 2001. "Repeated bargaining and the role of impatience and incomplete contracting," Labour Economics, Elsevier, vol. 8(5), pages 573-592, December.
    7. Charalambos D. Aliprantis & Kim C. Border, 2006. "Infinite Dimensional Analysis," Springer Books, Springer, edition 0, number 978-3-540-29587-7, November.
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    Cited by:

    1. Francesca Flamini, 2020. "Divide and Invest: Bargaining in a Dynamic Framework," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 37(1), pages 121-153, November.

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