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| Author: | Evans, R. |
| Title: | Sequential bargaining with correlated values. |
| Journal: | Review of Economic Studies
1989 : OCT, VOL. 56:188, p. 499-510 |
| Index terms: | BUYING SELLING ECONOMIC THEORY |
| Language: | eng |
| Abstract: | An infinite-horizon sequential bargaining game is analyzed (with one-side offers) between a buyer and a seller when the buyer's valuation depends on the seller's; the seller knows the value of the object and the buyer does not. The influence of relative discount factors on the solution is studied. It is shown, for example, that an impasse may result if the buyer is too impatient relative to the seller: the buyer makes a single take-it-or-leave-it offer. The argument in section 2 shows that under certain circumstances (for example, if the bargainers have the same discount rate and the buyer's expected value of the quality of the good is low enough) any specification of the bargaining game will give rise to impasses. |
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