IDEAS home Printed from https://ideas.repec.org/a/spr/reecde/v1y1994i1p55-77.html
   My bibliography  Save this article

Decentralized trade with bargaining and voluntary matching

Author

Listed:
  • Ebbe Hendon
  • Birgitte Sloth
  • Torben Tranæs

Abstract

Rubinstein and Wolinsky (1990) study a market with one seller, two buyers, and voluntary matching. Both the competitive outcome p[subscript c] and the bilateral bargaining outcome p[subscript b] are possible in subgame perfect equilibrium. We consider two variations. First, if there is a cost larger that p[subscript c]-p[subscript b] to the seller of changing partner, p[subscript b] is the unique outcome, otherwise no restriction expires. In the second variation the seller makes an Epsilon-binding preannouncement of whether he will change buyers after disagreement. If Epsilon is small there are equilibrium prices close to p[subscript b]. But for any Epsilon, if the discount factor is close to 1, the unique equilibrium price is p[subscript c].
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Ebbe Hendon & Birgitte Sloth & Torben Tranæs, 1994. "Decentralized trade with bargaining and voluntary matching," Review of Economic Design, Springer;Society for Economic Design, vol. 1(1), pages 55-77, December.
    • Handle: RePEc:spr:reecde:v:1:y:1994:i:1:p:55-77
    DOI: 10.1007/BF02716614
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/BF02716614
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/BF02716614?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    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. Hendon, Ebbs & Tranaes, Torben, 1991. "Sequential bargaining in a market with one seller and two different buyers," Games and Economic Behavior, Elsevier, vol. 3(4), pages 453-466, November.
    3. Rubinstein, Ariel & Wolinsky, Asher, 1985. "Equilibrium in a Market with Sequential Bargaining," Econometrica, Econometric Society, vol. 53(5), pages 1133-1150, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Calvo-Armengol, Antoni, 2003. "A decentralized market with trading links," Mathematical Social Sciences, Elsevier, vol. 45(1), pages 83-103, February.
    2. Sempere-Monerris, José J. & Vannetelbosch, Vincent J., 1997. "Bargaining with Externalities: Licensing of an Innovation," LIDAM Discussion Papers IRES 1997007, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    3. Mitsutoshi M. Adachi, 1998. "A note on frictions in the Bazaar type bargaining game," Investigaciones Economicas, Fundación SEPI, vol. 22(2), pages 293-304, May.
    4. Tranaes, Torben, 1998. "Tie-Breaking in Games of Perfect Information," Games and Economic Behavior, Elsevier, vol. 22(1), pages 148-161, January.
    5. Wooders, John, 1998. "Walrasian equilibrium in matching models," Mathematical Social Sciences, Elsevier, vol. 35(3), pages 245-259, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kalyan Chatterjee & Bhaskar Dutta, 2013. "Rubinstein Auctions: On Competition for Bargaining Partners," World Scientific Book Chapters, in: Bargaining in the Shadow of the Market Selected Papers on Bilateral and Multilateral Bargaining, chapter 3, pages 51-77, World Scientific Publishing Co. Pte. Ltd..
    2. Guth, Werner & Ritzberger, Klaus & van Damme, Eric, 2004. "On the Nash bargaining solution with noise," European Economic Review, Elsevier, vol. 48(3), pages 697-713, June.
    3. Arnold Polanski & Emiliya Lazarova, 2015. "Dynamic multilateral markets," International Journal of Game Theory, Springer;Game Theory Society, vol. 44(4), pages 815-833, November.
    4. Ennis, H.M.Huberto M., 2004. "Macroeconomic fluctuations and bargaining," Journal of Economic Theory, Elsevier, vol. 115(2), pages 322-340, April.
    5. Charness, Gary & Corominas-Bosch, Margarida & Frechette, Guillaume R., 2007. "Bargaining and network structure: An experiment," Journal of Economic Theory, Elsevier, vol. 136(1), pages 28-65, September.
    6. Simon Jäger & Benjamin Schoefer & Samuel Young & Josef Zweimüller, 2020. "Wages and the Value of Nonemployment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(4), pages 1905-1963.
    7. James S. Costain, 1998. "On the quantitative importance of wage bargaining models," Economics Working Papers 262, Department of Economics and Business, Universitat Pompeu Fabra.
    8. In-Koo Cho & Akihiko Matsui, 2012. "A Dynamic Foundation of the Rawlsian Maxmin Criterion," Dynamic Games and Applications, Springer, vol. 2(1), pages 51-70, March.
    9. Gale, Douglas & Sabourian, Hamid, 2006. "Markov equilibria in dynamic matching and bargaining games," Games and Economic Behavior, Elsevier, vol. 54(2), pages 336-352, February.
    10. Binmore, Ken & Osborne, Martin J. & Rubinstein, Ariel, 1992. "Noncooperative models of bargaining," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 7, pages 179-225, Elsevier.
    11. Nir Dagan & Roberto Serrano & Oscar Volij, 2000. "Bargaining, coalitions and competition," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 15(2), pages 279-296, March.
    12. Darpoe, Erik & Dominguez, Alvaro & Martin-Rodriguez, Maria, "undated". "Bargaining Dynamics and Varied Linking Costs in Stable Networks," AGI Working Paper Series 2024-04, Asian Growth Research Institute.
    13. Kjell Hausken, 1997. "Game-theoretic and Behavioral Negotiation Theory," Group Decision and Negotiation, Springer, vol. 6(6), pages 511-528, December.
    14. Mandel, Antoine & Gintis, Herbert, 2016. "Decentralized Pricing and the equivalence between Nash and Walrasian equilibrium," Journal of Mathematical Economics, Elsevier, vol. 63(C), pages 84-92.
    15. Spulber, Daniel F., 2016. "Patent licensing and bargaining with innovative complements and substitutes," Research in Economics, Elsevier, vol. 70(4), pages 693-713.
    16. Selçuk Özyurt, 2015. "Searching for a Bargain: Power of Strategic Commitment," American Economic Journal: Microeconomics, American Economic Association, vol. 7(1), pages 320-353, February.
    17. Dilmé, Francesc, 2023. "Bargaining in small dynamic markets," Journal of Economic Theory, Elsevier, vol. 207(C).
    18. Mitsutoshi M. Adachi, 1998. "A note on frictions in the Bazaar type bargaining game," Investigaciones Economicas, Fundación SEPI, vol. 22(2), pages 293-304, May.
    19. Been-Lon Chen, 1995. "Self-fulfilling expectations, history, and big push: A search equilibrium model of unemployment," Journal of Economics, Springer, vol. 61(3), pages 245-271, October.
    20. Elif Özcan-Tok, 2020. "Bargaining on supply chain networks with heterogeneous valuations," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 28(2), pages 506-525, July.

    More about this item

    Keywords

    Decentralized trade; Bargaining; Markets; Switching costs; Announcement; C78; D41;
    All these keywords.

    JEL classification:

    • O22 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:reecde:v:1:y:1994:i:1:p:55-77. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.