Daniel R. Vincent on Hugo F. Sonnenschein

“Repeated Signalling Games and Dynamic Trading Relationships” was the first paper I wrote after leaving Princeton and becoming an academic economist. For me, it was a natural successor to the three papers in my thesis, papers which marked me clearly as a student of Hugo Sonnenschein. My thesis treated dynamic trading games where two or three agents attempted to determine a price and time of trade for a single indivisible, durable good. The thesis papers owed a great deal to Hugo’s well-known paper with Robert Wilson and Faruk Gul [2], insofar as they employed a similar model and even used much the same strategy of proof. Indeed, the first paper of my thesis [4] owed its primary significance to the fact that it was able to reverse a famous prediction about durable goods monopoly offered in Gul, Sonnenschein and Wilson [2]. One interpretation of the model in their paper implies that when a bargainer is uncertain solely about the private valuation of her rival, then bargaining will only take a significant time to complete if the technology of making offers requires it. In contrast, I demonstrated that when the uncertainty is over the quality of the good to be traded, often bargaining games had to last a signficant time to ensure trade.