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# Subgame Perfect Equilibrium in a Bargaining Model with Deterministic Procedures

Listed:
• Mao, Liang

## Abstract

Two players, $A$ and $B$, bargain to divide a perfectly divisible pie. In a bargaining model with constant discount factors, $\delta_A$ and $\delta_B$, we extend \cite{Rubinstein82}'s alternating offers procedures to more general deterministic procedures so that any player in any period can be the proposer. We show that each bargaining game with a deterministic procedure has a unique subgame perfect equilibrium (SPE) payoff outcome, which is efficient. Conversely, each efficient division of the pie can be supported as an SPE outcome by some procedure if $\delta_A+\delta_B\geq 1$, while almost no division can ever be supported in SPE if \$\delta_A+\delta_B

## Suggested Citation

• Mao, Liang, 2015. "Subgame Perfect Equilibrium in a Bargaining Model with Deterministic Procedures," MPRA Paper 67859, University Library of Munich, Germany.
• Handle: RePEc:pra:mprapa:67859
as

File URL: https://mpra.ub.uni-muenchen.de/67859/1/MPRA_paper_67859.pdf
File Function: original version

## References listed on IDEAS

as
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9. Fershtman, Chaim, 1990. "The importance of the agenda in bargaining," Games and Economic Behavior, Elsevier, vol. 2(3), pages 224-238, September.
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11. Muthoo, Abhinay, 1990. "Bargaining without commitment," Games and Economic Behavior, Elsevier, vol. 2(3), pages 291-297, September.
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Full references (including those not matched with items on IDEAS)

### Keywords

noncooperative bargaining; subgame perfect equilibrium; bargaining procedure;

### 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

### NEP fields

This paper has been announced in the following NEP Reports:

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