The prevalence of take-it-or-leave-it offers

• 成果类型: Article
• 署名作者: Kambe, Shinsuke
• 署名单位: Gakushuin University
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2025.02.010
• 发表日期: 2025
• 页码: 42-58
• 关键词: Take-it-or-leave-it offers; The option to exit; Alternating-offer bargaining; Fixed costs of bargaining; Finite-horizon bargaining

摘要

We study the effect of the option to exit in finite-horizon, two-person bargaining where players make offers alternatingly and incur fixed costs per period. We show that players use take-it-or- leave-it strategies in the unique equilibrium when there is no discounting. Expecting a low payoff at the next period as a respondent, a proposer would choose to exit after her demand were rejected. This causes her opponent to accept her take-it-or-leave-it offer. This prediction is generically valid even when the division at the final period is exogenously given, and is conditionally true when the cost of bargaining includes discounting.