Sequential bargaining under asymmetric information
type: Item
instance of: scholarly article
title: Sequential bargaining under asymmetric information
zbMATH Open document ID: 0616.90107
DOI: 10.1016/0022-0531(86)90023-2
author: Sanford J. Grossman
author: Motty Perry
published in: Journal of Economic Theory
publication date: 1986-01-01T00:00:00Z
full work available at URL: t0056.pdf
review text: We analyze an infinite stage, alternating offer bargaining game in which the buyer knows the gains from trade but the seller does not. Under weak assumptions the game has a unique candidate perfect sequential equilibrium, and it can be solved by backward induction. Equilibrium involves the seller making an offer which is accepted by buyers with high gains from trade, while buyers with medium gains reject and make a counteroffer which the seller accepts. Buyers with low gains make an unacceptable offer, and then the whole process repeats itself. Numerical simulations demonstrate the effects of uncertainty on the length of bargaining.
Mathematics Subject Classification ID: 91A12
zbMATH DE Number: 3999717
zbMATH Keywords: infinite stage, alternating offer bargaining game
zbMATH Keywords: perfect sequential equilibrium
zbMATH Keywords: backward induction
Wikidata QID: Q29030945
MaRDI profile type: Publication
OpenAlex ID: W3123336481
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description: scientific article; zbMATH DE number 3999717