Sequential Bargaining without a Common Prior on the Recognition Process

41 Pages Posted: 11 Dec 2001  

Muhamet Yildiz

Massachusetts Institute of Technology (MIT) - Department of Economics

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

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

Muhamet Yildiz (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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