Rubinstein bargaining with two-sided outside options

C  Ponsati; J  Sakovics

Rubinstein bargaining with two-sided outside options

C Ponsati
, J Sakovics

School of Economics

Research output: Contribution to journal › Article › peer-review

Abstract

In this note we show that if in the standard Rubinstein model both players are allowed to leave the negotiation after a rejection, in which case they obtain a payoff of zero, then there exist a continuum of subgame-perfect equilibrium outcomes, including some which involve significant delay. We also fully characterize the case in which, upon quitting, the players can take an outside option of positive value.

Original language	English
Pages (from-to)	667-672
Number of pages	6
Journal	Economic Theory
Volume	11
Issue number	3
Publication status	Published - May 1998

Keywords / Materials (for Non-textual outputs)

PERFECT EQUILIBRIUM
MODEL

1 Working paper

Rubinstein Bargaining with Two-Sided Options
Sakovics, J. & Ponsati, C., 1995, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC), (UFAE and IAE Working Papers).
Research output: Working paper

Cite this

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title = "Rubinstein bargaining with two-sided outside options",

abstract = "In this note we show that if in the standard Rubinstein model both players are allowed to leave the negotiation after a rejection, in which case they obtain a payoff of zero, then there exist a continuum of subgame-perfect equilibrium outcomes, including some which involve significant delay. We also fully characterize the case in which, upon quitting, the players can take an outside option of positive value.",

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author = "C Ponsati and J Sakovics",

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N2 - In this note we show that if in the standard Rubinstein model both players are allowed to leave the negotiation after a rejection, in which case they obtain a payoff of zero, then there exist a continuum of subgame-perfect equilibrium outcomes, including some which involve significant delay. We also fully characterize the case in which, upon quitting, the players can take an outside option of positive value.

AB - In this note we show that if in the standard Rubinstein model both players are allowed to leave the negotiation after a rejection, in which case they obtain a payoff of zero, then there exist a continuum of subgame-perfect equilibrium outcomes, including some which involve significant delay. We also fully characterize the case in which, upon quitting, the players can take an outside option of positive value.

KW - PERFECT EQUILIBRIUM

KW - MODEL

M3 - Article

SN - 0938-2259

VL - 11

SP - 667

EP - 672

JO - Economic Theory

JF - Economic Theory

IS - 3

ER -

Rubinstein bargaining with two-sided outside options

Abstract

Keywords / Materials (for Non-textual outputs)

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Research output

Rubinstein Bargaining with Two-Sided Options

Cite this