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Can learning cause shorter delays in reaching agreements?

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  • Weng, Xi

Abstract

This paper uses a continuous-time war of attrition model to investigate how learning about private payoffs affects delays in reaching agreement. At each point in time, players may receive a private Poisson signal that completely reveals the concession payoff to be high (good-news learning) or low (bad-news learning). In the good-news model, the expected delay is always non-monotonic in the learning rate: an increase in the learning rate prolongs delay in agreement if the learning rate is sufficiently low. In the bad-news model, numerical examples suggest learning prolongs delay as well.

Suggested Citation

  • Weng, Xi, 2015. "Can learning cause shorter delays in reaching agreements?," Journal of Mathematical Economics, Elsevier, vol. 60(C), pages 49-62.
    • Handle: RePEc:eee:mateco:v:60:y:2015:i:c:p:49-62
    DOI: 10.1016/j.jmateco.2015.06.010
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    References listed on IDEAS

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