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Relative Concerns and Delays in Bargaining with Private Information

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  • 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)

Abstract

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.

Suggested Citation

  • Ana Mauleon & Vincent Vannetelbosch, 2013. "Relative Concerns and Delays in Bargaining with Private Information," Games, MDPI, Open Access Journal, vol. 4(3), pages 1-10, June.
  • Handle: RePEc:gam:jgames:v:4:y:2013:i:3:p:329-338:d:26739
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    References listed on IDEAS

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    1. Fleurbaey,Marc & Maniquet,François, 2011. "A Theory of Fairness and Social Welfare," Cambridge Books, Cambridge University Press, number 9780521715348, April.
    2. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    3. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 817-868.
    4. Ken Binmore & Ariel Rubinstein & Asher Wolinsky, 1986. "The Nash Bargaining Solution in Economic Modelling," RAND Journal of Economics, The RAND Corporation, vol. 17(2), pages 176-188, Summer.
    5. Caulier, Jean-François & Mauleon, Ana & Vannetelbosch, Vincent, 2015. "Allocation rules for coalitional network games," Mathematical Social Sciences, Elsevier, vol. 78(C), pages 80-88.
    6. Ed Hopkins, 2008. "Inequality, happiness and relative concerns: What actually is their relationship?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 6(4), pages 351-372, December.
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    11. Joel Watson, 1998. "Alternating-Offer Bargaining with Two-Sided Incomplete Information," Review of Economic Studies, Oxford University Press, vol. 65(3), pages 573-594.
    12. Avery Christopher & Zemsky Peter B., 1994. "Money Burning and Multiple Equilibria in Bargaining," Games and Economic Behavior, Elsevier, vol. 7(2), pages 154-168, September.
    13. Ana Mauleon & Vincent Vannetelbosch, 2005. "Strategic union delegation and strike activity," Canadian Journal of Economics, Canadian Economics Association, vol. 38(1), pages 149-173, February.
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    Cited by:

    1. Kohler, Stefan, 2013. "Inequality aversion causes equal or unequal division in alternating-offer bargaining," MPRA Paper 40764, University Library of Munich, Germany.

    More about this item

    Keywords

    relative concerns; alternating-offer bargaining; private information; maximal delays;

    JEL classification:

    • C - Mathematical and Quantitative Methods
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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