Selective acceptance and inefficiency in a two-issue complete information bargaining game (Q1577961)
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English | Selective acceptance and inefficiency in a two-issue complete information bargaining game |
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Selective acceptance and inefficiency in a two-issue complete information bargaining game (English)
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2 May 2001
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The author introduces a model of a two issue bargaining game in which settlement may be reached for one of the two issues while negotiation continues over the other issue. With this possibility permitted, the paper examines the effect of a selective acceptance rule on the outcome of this alternating-offer game. It is shown that if one issue is indivisible, there are inefficient subgame perfect equilibria with no Pareto-improving alternative equilibria. Examples are also presented to show a strong form of inefficiency in an alternating-offer bargaining game with complete (and perfect) information.
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two issue bargaining game
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selective acceptance
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package acceptance
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subgame perfect equilibria
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opposing valuations
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inefficient equilibria
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