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Relative Concerns and Delays in Bargaining with Private Information

Listed author(s):
  • 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: 1-10

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Handle: RePEc:gam:jgames:v:4:y:2013:i:3:p:329-338:d:26739
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  1. MAULEON, Ana & VANNETELBOSCH, Vincent, "undated". "Strategic union delegation and strike activity," CORE Discussion Papers RP 1766, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  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, "undated". "A Theory of Fairness, Competition and Cooperation," IEW - Working Papers 004, Institute for Empirical Research in Economics - University of Zurich.
  4. Ed Hopkins, 2008. "Inequality, Happiness and Relative Concerns: What Actually is their Relationship?," ESE Discussion Papers 180, Edinburgh School of Economics, University of Edinburgh.
  5. Hongbin Cai, 2003. "Inefficient Markov perfect equilibria in multilateral bargaining," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 22(3), pages 583-606, October.
  6. Clark, Andrew E. & Oswald, Andrew J., 1994. "Satisfaction and comparison income," CEPREMAP Working Papers (Couverture Orange) 9408, CEPREMAP.
  7. Fleurbaey,Marc & Maniquet,François, 2011. "A Theory of Fairness and Social Welfare," Cambridge Books, Cambridge University Press, number 9780521715348, December.
  8. 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.
  9. Houba, Harold & Wen, Quan, 2011. "Extreme equilibria in the negotiation model with different time preferences," Games and Economic Behavior, Elsevier, vol. 73(2), pages 507-516.
  10. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
  11. Cramton, Peter C & Tracy, Joseph S, 1994. "The Determinants of U.S. Labor Disputes," Journal of Labor Economics, University of Chicago Press, vol. 12(2), pages 180-209, April.
  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. Caulier, Jean-François & Mauleon, Ana & Vannetelbosch, Vincent, 2015. "Allocation rules for coalitional network games," Mathematical Social Sciences, Elsevier, vol. 78(C), pages 80-88.
  14. Duranton, Gilles & Martin, Philippe & Mayer, Thierry & Mayneris, Florian, 2010. "The Economics of Clusters: Lessons from the French Experience," OUP Catalogue, Oxford University Press, number 9780199592203.
  15. Joel Watson, 1998. "Alternating-Offer Bargaining with Two-Sided Incomplete Information," Review of Economic Studies, Oxford University Press, vol. 65(3), pages 573-594.
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