A noncooperative solution to a two-person bargaining game (Q1088920)

I have argued that sequential bargaining games in which the intervals between offers are allowed to become indefinitely small cannot be used to model unstructured bargaining situations, because the incentives of the players change as the intervals become significant. Thus, contrary to claims by several recent authors, such models cannot be used to justify the Bishop-Foldes bargaining solution. I have shown that this solution can be justified, on the other hand, by a very modest extension of recent work on rational expectations in noncooperative games in extensive form.