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A Non-cooperative Bargaining Theory with Incomplete Information: Verifiable Types

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  • OKADA, Akira

Abstract

We consider a non-cooperative sequential bargaining game with incomplete information where two players negotiate for mechanisms with ex post verifiable types at the interim stage. We prove the existence of a stationary sequential equilibrium of the bargaining game where the ex post Nash bargaining solution with no delay is asymptotically implemented with probability one. Further, the ex post Nash bargaining solution is a unique outcome of a stationary equilibrium under the property of Independence of Irrelevant Types (IIT), whereby the response of every type of a player is independent of allocations proposed to his other types, and under a self-selection property of their belief. Interim efficiency (insurance benefit) in the Bayesian bargaining problem is not necessarily supported in a non-cooperative approach.

Suggested Citation

  • OKADA, Akira, 2014. "A Non-cooperative Bargaining Theory with Incomplete Information: Verifiable Types," Discussion Papers 2013-15, Graduate School of Economics, Hitotsubashi University.
  • Handle: RePEc:hit:econdp:2013-15
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    References listed on IDEAS

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    1. Myerson, Roger B, 1983. "Mechanism Design by an Informed Principal," Econometrica, Econometric Society, vol. 51(6), pages 1767-1797, November.
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    Cited by:

    1. Akira Okada, 2015. "Cooperation and Institution in Games," The Japanese Economic Review, Japanese Economic Association, vol. 66(1), pages 1-32, March.
    2. Akira Okada, 2018. "Incomplete Contract and Verifiability," KIER Working Papers 982, Kyoto University, Institute of Economic Research.

    More about this item

    Keywords

    bargaining; incomplete information; mechanism selection; ex post Nash bargaining solution; non-cooperative games;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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