Dynamic bargaining theory
The goal of this paper is to extend the analysis of strategic bargaining to nonstationary environments, where preferences or opportunities may be changing over time. We are mainly interested in equilibria where trade occurs immediately, once the agents start negotiating, but the terms of trade depend on when the negotiations begin. We characterize equilibria in terms of simply dynamical systems, and compare these outcomes with the myopic Nash bargaining solution. We illustrate the practicality of the approach with an application in monetary economics.
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References listed on IDEAS
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- Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
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"The Matching Process as a Noncooperative Bargaining Game,"
NBER Chapters,in: The Economics of Information and Uncertainty, pages 233-258
National Bureau of Economic Research, Inc.
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- Mortensen, Dale T, 1989. " The Persistence and Indeterminancy of Unemployment in Search Equilibrium," Scandinavian Journal of Economics, Wiley Blackwell, vol. 91(2), pages 347-370.
- Dale T. Mortensen, 1988. "The Persistence and Indeterminacy of Unemployment in Search Equilibrium," Discussion Papers 810, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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- Kiyotaki, Nobuhiro & Wright, Randall, 1993. "A Search-Theoretic Approach to Monetary Economics," American Economic Review, American Economic Association, vol. 83(1), pages 63-77, March.
- Merlo, A. & Wilson, C., 1993. "A Stochastic Model of Sequential Bargaining with Complete Information and Non-Transferable Utility," Working Papers 93-06, C.V. Starr Center for Applied Economics, New York University.
- Shaked, Avner & Sutton, John, 1984. "Involuntary Unemployment as a Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 52(6), pages 1351-1364, November. Full references (including those not matched with items on IDEAS)
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