Bargaining Power in Repeated Negotiations with Outside Options

Groh, Christian

Document Type: Working paper
Year of publication: 1999
The title of a journal, publication series: GK Working Paper Series
Volume: 99-08
Place of publication: Mannheim
Publication language: English
Institution: School of Law and Economics > Graduiertenkolleg VWL/BWL
Subject: 330 Economics
Abstract: For repeated ultimatum bargaining, the Folk Theorem of repeated game the- ory suggests that there are many equilibria, among them equilibria in which the second mover, say, the buyer, appropriates all the surplus. This paper shows that the presence of outside options in form of alternative trading partners eliminates some of these equilibria by reducing the cope for extracting surplus in repeated bargaining. The structure of optimal equilibria is characterized.

Dieser Eintrag ist Teil der Universitätsbibliographie.

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