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On Rationalizability in Two-Person Alternating-Offer Bargaining

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  • Vannetelbosch, Vincent J.

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES); UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE))

Abstract

This paper reconsiders Rubinstein's alternating-offer bargaining game with complete information. We define rationalizability for multi-stage games with observed actions. Whe show that rationalizability does not exclude perpetual disagreement or delay. Then, we define trembling-hand rationalizability and we show that it implies a unique solution. Moreover, this unique solution is the subgame perfect equilibrium. We also reconsider an extension of Rubinstein's game wherein there is a smallest money unit.

Suggested Citation

  • Vannetelbosch, Vincent J., 1996. "On Rationalizability in Two-Person Alternating-Offer Bargaining," LIDAM Discussion Papers IRES 1996023, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:1996023
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    File URL: http://sites.uclouvain.be/econ/DP/IRES/9623.pdf
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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.
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    More about this item

    Keywords

    bargaining; alternating-offer; rationalizability; money unit;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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