Tough negotiations: Bilateral bargaining with durable commitments

• 成果类型: Article
• 署名作者: Ellingsen, Tore; Miettinen, Topi
• 署名单位: Stockholm School of Economics; Hanken School of Economics; Stockholm School of Economics
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2014.05.016
• 发表日期: 2014
• 页码: 353-366
• 关键词: Bargaining; COMMITMENT; DISAGREEMENT; war of attrition

摘要

We offer a tractable model of tough negotiations and delayed agreement. The setting is an infinite horizon bilateral bargaining game in which negotiators can make strategic commitments to durable offers. Commitments decay stochastically, but uncommitted negotiators can make new commitments. The game's unique Markov Perfect equilibrium outcome takes the form of a war of attrition: Negotiators initially commit to incompatible offers, but agreement occurs once a negotiator's commitment decays. If commitments decay more quickly, the terms of the agreement become more equal. In expectation, more patient, committed, and less risk averse negotiators obtain a larger fraction of the surplus. (C) 2014 Elsevier Inc. All rights reserved.