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Relative Concerns and Delays in Bargaining with Private Information

  • Ana Mauleon

    ()

    (CORE, University of Louvain, 34 Voie du Roman Pays, 1348 Louvain-la-Neuve, Belgium
    CEREC, Saint-Louis University, 43 Boulevard du Jardin Botanique, 1000 Brussels, Belgium)

  • Vincent Vannetelbosch

    ()

    (CORE, University of Louvain, 34 Voie du Roman Pays, 1348 Louvain-la-Neuve, Belgium
    CEREC, Saint-Louis University, 43 Boulevard du Jardin Botanique, 1000 Brussels, Belgium)

We consider Rubinstein’s two-person alternating-offer bargaining model with two-sided incomplete information. We investigate the effects of one party having relative concerns about the bargaining outcome and the delay in reaching an agreement. We find that facing an opponent with stronger relative concerns only hurts the bargainer when she is stronger than her opponent. In addition, we show that an increase of one party’s relative concerns will decrease the maximum delay in reaching an agreement.

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Article provided by MDPI, Open Access Journal in its journal Games.

Volume (Year): 4 (2013)
Issue (Month): 3 (June)
Pages: 329-338

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Handle: RePEc:gam:jgames:v:4:y:2013:i:3:p:329-338:d:26739
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  11. Watson, Joel, 1998. "Alternating-Offer Bargaining with Two-Sided Incomplete Information," Review of Economic Studies, Wiley Blackwell, vol. 65(3), pages 573-94, July.
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