Alternating-Offer Bargaining with Two-Sided Incomplete Information

S-Tier
Journal: Review of Economic Studies
Year: 1998
Volume: 65
Issue: 3
Pages: 573-594

Score contribution per author:

8.043 = (α=2.01 / 1 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

I study alternating-offer bargaining games with two-sided incomplete information about the players' discount rates. For both perfect Bayesian equilibrium and a rationalizability-style notion, I characterize the set of expected payoffs which may arise in the game. I also construct bounds on agreements that may be made. The set of expected payoffs is easy to compute and incorporate into applied models. My main result is a full characterization of the set of perfect Bayesian equilibrium payoffs for games in which the distribution over the players' discount rates is of wide support, yet is in a weak sense close to a point mass distribution. I prove a lopsided convergence result: each player cannot gain from a slight chance that she is a strong type, but the player can suffer greatly if there is a slight chance that she is a weak type.

Technical Details

RePEc Handle
repec:oup:restud:v:65:y:1998:i:3:p:573-594.
Journal Field
General
Author Count
1
Added to Database
2026-01-29