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Optimally stubborn: how long to hold and who will fold?

Author

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  • Sanktjohanser, Anna M.

    (Toulouse School of Economics)

Abstract

I consider a model of reputational bargaining in which the stubborn type can choose their initial demand. There are two types of players: rational and stubborn. The game has two stages: a demand stage and a concession stage. Types can pool or separate in equilibrium for any fixed probability of facing a stubborn type. When the probability of facing a stubborn type is small, any feasible payoff can be achieved in equilibrium for either type. When the probability is large, there is either immediate agreement or long delays.

Suggested Citation

  • Sanktjohanser, Anna M., 0. "Optimally stubborn: how long to hold and who will fold?," Theoretical Economics, Econometric Society.
    • Handle: RePEc:the:publsh:5977
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    References listed on IDEAS

    as
    1. Olivier Compte & Philippe Jehiel, 2002. "On the Role of Outside Options in Bargaining with Obstinate Parties," Econometrica, Econometric Society, vol. 70(4), pages 1477-1517, July.
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    More about this item

    Keywords

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    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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