Bargaining with common values (Q1262825): Difference between revisions
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Revision as of 22:36, 19 March 2024
scientific article
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English | Bargaining with common values |
scientific article |
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Bargaining with common values (English)
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1989
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This paper examines a bargaining model with asymmetric information in which the private valuations of the two bargaining agents are correlated. It shows that equilibria in such models typically exhibit a significant probability of a significant delay to agreement. The paper characterizes the unique perfect Bayesian equilibrium to the game in which an uninformed buyer makes offers to a privately informed sellers. It also shows, by example, that in this framework bargainers may rationally break off negotiations even in the presence of commonly known gains from trade.
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bargaining
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asymmetric information
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delay to agreement
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unique perfect Bayesian equilibrium
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