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Time-Preference Heterogeneity and Multiplicity of Equilibria in Two-Group Bargaining

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Listed:
  • Daniel Cardona

    (Departament d’Economia Aplicada, Universitat de les Illes Balears, Campus UIB, 07122 Palma de Mallorca, Spain)

  • Antoni Rubí-Barceló

    (Departament d’Economia Aplicada, Universitat de les Illes Balears, Campus UIB, 07122 Palma de Mallorca, Spain)

Abstract

We consider a multilateral bargaining game in which the agents can be classified into two groups according to their instantaneous preferences. In one of these groups there is one agent with a different discount factor. We analyze how this time-preference heterogeneity may generate multiplicity of equilibria. When such an agent is sufficiently more patient than the rest, there is an equilibrium in which her group-mates make the same proposal as the members of the other group. Thus, in heterogeneous groups the presence of more patient members may reduce the utility of its members.

Suggested Citation

  • Daniel Cardona & Antoni Rubí-Barceló, 2016. "Time-Preference Heterogeneity and Multiplicity of Equilibria in Two-Group Bargaining," Games, MDPI, vol. 7(2), pages 1-17, May.
    • Handle: RePEc:gam:jgames:v:7:y:2016:i:2:p:12-:d:69916
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    References listed on IDEAS

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    More about this item

    Keywords

    multilateral bargaining; one-dimensional; multiple equilibria; time preference; C78;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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