Commitment and compromise in bargaining

Li, Duozhe

doi:10.1016/j.jebo.2010.10.008

Cited by 9 publications

(4 citation statements)

References 7 publications

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“…Kennan and Wilson (1993) offer an early literature review. Ellingsen and Miettinen (2008) and Li (2011) study bilateral bargaining with firm commitments to being tough and analyze when commitment tactics cause an impasse. Ellingsen and Miettinen (2014) consider bilateral bargaining if commitments decay stochastically.…”

Section: Introductionmentioning

confidence: 99%

Equilibrium opacity in ultimatum‐offer bargaining

Konrad

Thum

2020

J Public Economic Theory

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We consider ultimatum bargaining between a seller and a buyer of an asset. They know each other's valuation of the asset. Both can defer their decisions to delegates. These delegates have opaque preferences. Seller and buyer choose the opacity of their delegate. For the seller's delegate this choice is restricted to a random reservation price drawn from the set of symmetric two‐point distributions around the seller's true reservation price. The opacity choice of the buyer's delegate is restricted to a random willingness‐to‐pay drawn from the set of symmetric two‐point distribution around the buyer's true willingness‐to‐pay. We characterize the set of pure‐strategy equilibria in their delegation choices. Multiple equilibria arise. Except for two corner solutions, both players will exploit the strategy of opacity. A large set of efficient equilibria exist. For these, opacity choices do not reduce the probability of transacting, but benefit the buyer compared with the no‐delegation equilibrium. We also study the robustness of the results with respect to the player's ability to also resort to a tougher delegate in addition to the opacity choice.

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Section: Introductionmentioning

confidence: 99%

Equilibrium opacity in ultimatum‐offer bargaining

Konrad

Thum

2020

J Public Economic Theory

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“…We then extend the static NDG environment to an infinite-horizon NDG where with probability p any incompatible demands are resolved via arbitration in period t, while with probability 1 − p the game moves to the next period, t + 1, in which players make fresh demands. We show that for each discount factor δ, all stationary equilibria of the infinite horizon game tend to the convergent point of the static game if the regularity conditions on p are now satisfied by the function 3 Our model also shares some features with those on bargaining with observable commitment studied by Crawford (1982), Ellingsen and Miettinen (2008) or Li (2011). In these models, players make simultaneous demands and also have the option to make irreversible commitments to their demands.…”

Section: Introductionmentioning

confidence: 74%

Random-settlement arbitration and the generalized Nash solution: one-shot and infinite-horizon cases

Anbarcı

Kang

Roy³

2018

Econ Theory

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“…Parties of negotiations often have access to actions that commit them to some strategically chosen bargaining position. The present paper builds on formal game theoretic analysis inspired by Schelling's work (Crawford, 1982;Muthoo, 1992Muthoo, , 1996Li, 2011;Miettinen, 2008, 2014). We analyze the effect of commitment strategies in a dynamic complete information bargaining framework.…”

Section: Introductionmentioning

confidence: 99%

Commitment in alternating offers bargaining

Miettinen

Perea

2015

Mathematical Social Sciences

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h i g h l i g h t s• We extend the alternating-offer bargaining model. • At the start of each bargaining round, each party may commit to a share of the pie.• When commitment costs are small but increasing, there is a second mover advantage. • This reverses the sharing of Rubinstein (1982). a b s t r a c tWe extend the Ståhl-Rubinstein alternating-offer bargaining procedure to allow players to simultaneously and visibly commit to some share of the pie prior to, and for the duration of, each bargaining round. If commitment costs are small but increasing in the committed share, then the unique subgame perfect equilibrium outcome exhibits a second mover advantage. In particular, as the horizon approaches infinity, and commitment costs approach zero, the unique bargaining outcome corresponds to the reversed Rubinstein outcome (δ/(1 + δ), 1/(1 + δ)), where δ is the common discount factor.

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Commitment and compromise in bargaining

Cited by 9 publications

References 7 publications

Equilibrium opacity in ultimatum‐offer bargaining

Equilibrium opacity in ultimatum‐offer bargaining

Random-settlement arbitration and the generalized Nash solution: one-shot and infinite-horizon cases

Commitment in alternating offers bargaining

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