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Reputation Effects in Bargaining Games

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  • Eun‐Soo Park

Abstract

This paper studies reputation effects in a dynamic simultaneous‐offer bilateral bargaining game in which one player might have some kind of irrational commitment that compels him to insist on some particular bargaining allocation. It is shown that if this player insists on this allocation, then the bargaining game will end within the first few rounds and he can get an expected payoff close to that allocation. More importantly, the upper bound within which the bargaining game ends does not depend on the relative strength of the two players.

Suggested Citation

  • Eun‐Soo Park, 1999. "Reputation Effects in Bargaining Games," Southern Economic Journal, John Wiley & Sons, vol. 66(1), pages 186-192, July.
    • Handle: RePEc:wly:soecon:v:66:y:1999:i:1:p:186-192
    DOI: 10.1002/j.2325-8012.1999.tb00233.x
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    References listed on IDEAS

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    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. Ochs, Jack & Roth, Alvin E, 1989. "An Experimental Study of Sequential Bargaining," American Economic Review, American Economic Association, vol. 79(3), pages 355-384, June.
    3. Dekel, Eddie, 1990. "Simultaneous offers and the inefficiency of bargaining: A two-period example," Journal of Economic Theory, Elsevier, vol. 50(2), pages 300-308, April.
    4. Kreps, David M., 1990. "Game Theory and Economic Modelling," OUP Catalogue, Oxford University Press, number 9780198283812.
    5. Camerer, Colin & Weigelt, Keith, 1988. "Experimental Tests of a Sequential Equilibrium Reputation Model," Econometrica, Econometric Society, vol. 56(1), pages 1-36, January.
    6. Neral, John & Ochs, Jack, 1992. "The Sequential Equilibrium Theory of Reputation Building: A Further Test," Econometrica, Econometric Society, vol. 60(5), pages 1151-1169, September.
    7. Roth, Alvin E & Schoumaker, Francoise, 1983. "Expectations and Reputations in Bargaining: An Experimental Study," American Economic Review, American Economic Association, vol. 73(3), pages 362-372, June.
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