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Bargaining Model With Sequences Of Discount Rates And Bargaining Costs

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  • AGNIESZKA RUSINOWSKA

    (Department of Philosophy, Tilburg University, P.O. Box 90153, 5000 LE Tilburg, The Netherlands;
    Warsaw School of Economics, Department of Mathematical Economics, Al. Niepodleglosci 162, 02-554 Warsaw, Poland)

Abstract

The paper is a kind of generalization of Rubinstein bargaining model. Rubinstein assumed that preferences of the players were constant in time, and he analyzed models in which preferences of each player were defined either by constant discount rate or by constant bargaining cost. In this paper, a bargaining model is presented, in which preferences of each player are expressedsimultaneouslybysequenceof discount rates andsequenceof bargaining costs varying in time. The results presented in the paper concern subgame perfect equilibria. There is a theorem concerning sufficient and necessary conditions for the existence of subgame perfect equilibrium of the game. Moreover, some theorems presenting forms of subgame perfect equilibria for various cases of the model analyzed have been proved here. A possibility of delay in reaching an agreement is also considered in the paper. If we analyze a class of strategies, that depend on the former history, a delay can appear for some models. The adequate examples are presented. In the paper, some applications of the bargaining model are also described.

Suggested Citation

  • Agnieszka Rusinowska, 2004. "Bargaining Model With Sequences Of Discount Rates And Bargaining Costs," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 6(02), pages 265-280.
    • Handle: RePEc:wsi:igtrxx:v:06:y:2004:i:02:n:s0219198904000198
    DOI: 10.1142/S0219198904000198
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    References listed on IDEAS

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    1. Houba, Harold & Sneek, Koos & Vardy, Felix, 2000. "Can negotiations prevent fish wars?," Journal of Economic Dynamics and Control, Elsevier, vol. 24(8), pages 1265-1280, July.
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    Citations

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    Cited by:

    1. Ahmet Ozkardas & Agnieszka Rusinowska, 2014. "Holdout threats of the union during wage bargaining," Documents de travail du Centre d'Economie de la Sorbonne 14072, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    2. Lu, Shih En, 2016. "Self-control and bargaining," Journal of Economic Theory, Elsevier, vol. 165(C), pages 390-413.

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    More about this item

    Keywords

    Bargaining game; discount rates varying in time; bargaining costs varying in time; subgame perfect equilibrium;
    All these keywords.

    JEL classification:

    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • C0 - Mathematical and Quantitative Methods - - General
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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