Bargaining under liquidity constraints: Unified strategic foundations of the Nash and Kalai solutions

• 成果类型: Article
• 署名作者: Hu, Tai-Wei; Rocheteau, Guillaume
• 署名单位: University of Bristol; University of California System; University of California Irvine; Universite Paris-Pantheon-Assas
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2020.105098
• 发表日期: 2020
• 关键词: Bargaining with an agenda; Nash program; Bargaining solution

摘要

We provide unified strategic foundations for the Nash (1950) and Kalai (1977) solutions in the context of negotiations under liquidity constraints. We propose an N-round game where in each round a seller and a buyer with limited payment capacity negotiate a bundle of divisible goods, where bundle sizes can vary across rounds, according to Rubinstein's (1982) alternating-offer game. The game implements the Nash solution if N = 1 and the Kalai solution if N = +infinity and bundle sizes are infinitesimal. If N is set by one player ex ante, the buyer chooses N = 1 while the seller chooses N = +infinity. We endogenize liquidity constraints and show they bind for all N < +infinity, even when there is no cost in holding liquidity. (c) 2020 Elsevier Inc. All rights reserved.