Bargaining under almost complete information

• 成果类型: Article
• 署名作者: Basak, Deepal
• 署名单位: Indiana University System; Indiana University Bloomington; IU Kelley School of Business
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2023.105758
• 发表日期: 2023
• 关键词: Bargaining; higher-order uncertainty; Public sentiment; reputation

摘要

We consider the canonical frequent-offer Rubinstein bargaining game between two leaders on a policy issue. The public sentiment on this issue leans toward one leader or the other. Public sentiment determines the maximum compromise a leader can make without risking getting primaried. We introduce a positive probability.. that the leaders are uninformed about the sentiment. We show that a unique equilibrium emerges that resembles a war of attrition, in which one of the leaders may demand too much even after learning that the sentiment leans the other way. For a given bargaining environment, as.. converges to zero, in every state, the leaders almost immediately agree to the same policy position as they do under complete information. However, this convergence does not hold in the uniform sense, nor does it necessarily hold for more than two states.