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Malice and patience in Rubinstein bargaining

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  • Guha, Brishti

Abstract

If two players playing a Rubinstein alternating offers game are highly malicious (getting a high utility from “malice” in every period when the other player does not obtain a share in a fixed pie), and highly patient, no equilibrium with an agreement exists and players choose perpetual disagreement. This does not change if the players are subjected to a known deadline after which the pie will be appropriated by outside agencies or disappear: perpetual disagreement is still the only outcome. If in addition players are required to pay endogenously determined fines if they fail to reach agreement, players with discount factors in a certain range do reach agreement, but only at the deadline. However, infinitely patient players would never reach agreement for any feasible level of one-time fines. The result contrasts with spiteful or envious preferences. Our results highlight a novel reason for failure to resolve property disputes.

Suggested Citation

  • Guha, Brishti, 2019. "Malice and patience in Rubinstein bargaining," Research in Economics, Elsevier, vol. 73(3), pages 264-270.
    • Handle: RePEc:eee:reecon:v:73:y:2019:i:3:p:264-270
    DOI: 10.1016/j.rie.2019.07.006
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    References listed on IDEAS

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    More about this item

    Keywords

    Malice; Patience; Rubinstein bargaining; Deadlines;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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