Rubinstein bargaining with two-sided outside options

C Ponsati; J Sakovics

Rubinstein bargaining with two-sided outside options

C Ponsati, J Sakovics^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

Abstract

In this note we show that if in the standard Rubinstein model both players are allowed to leave the negotiation after a rejection, in which case they obtain a payoff of zero, then there exist a continuum of subgame-perfect equilibrium outcomes, including some which involve significant delay. We also fully characterize the case in which, upon quitting, the players can take an outside option of positive value.

Original language	English
Pages (from-to)	667-672
Number of pages	6
Journal	Economic Theory
Volume	11
Issue number	3
Publication status	Published - May 1998

Keywords

PERFECT EQUILIBRIUM
MODEL

Cite this

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title = "Rubinstein bargaining with two-sided outside options",

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AU - Sakovics, J

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AB - In this note we show that if in the standard Rubinstein model both players are allowed to leave the negotiation after a rejection, in which case they obtain a payoff of zero, then there exist a continuum of subgame-perfect equilibrium outcomes, including some which involve significant delay. We also fully characterize the case in which, upon quitting, the players can take an outside option of positive value.

KW - PERFECT EQUILIBRIUM

KW - MODEL

UR - https://www.scopus.com/pages/publications/0032219888

M3 - Article

SN - 0938-2259

VL - 11

SP - 667

EP - 672

JO - Economic Theory

JF - Economic Theory

IS - 3

ER -

Rubinstein bargaining with two-sided outside options

Abstract

Keywords

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