Sequential Bargaining Without a Common Prior on the Recognition Process
41 Pages Posted: 11 Dec 2001
Date Written: June 2001
Abstract
We analyze a sequential bargaining model, where players are allowed to hold different beliefs about which players will make an offer and when. Excessive optimism about making offers in the future can cause a delay in agreement. Despite this, the main result states that, if players will remain sufficiently optimistic for a sufficiently long future, then in equilibrium they will agree immediately.
Keywords: Bargaining, Misperceptions, Optimism, Deadline effect
JEL Classification: C73, C78, D84
Suggested Citation: Suggested Citation
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