41 Pages Posted: 11 Dec 2001
Date Written: June 2001
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
Yildiz, Muhamet, Sequential Bargaining without a Common Prior on the Recognition Process (June 2001). MIT Department of Economics Working Paper No. 01-43. Available at SSRN: https://ssrn.com/abstract=293395 or http://dx.doi.org/10.2139/ssrn.293395