Consistent Bargaining

8 Pages Posted: 7 Dec 2017

See all articles by Oz Shy

Oz Shy

Federal Reserve Banks - Federal Reserve Bank of Atlanta

Date Written: February 27, 2010

Abstract

This short paper demonstrates that the equilibrium payoffs of an alternating-offers bargaining game over a unit of surplus converge to equal division provided that the parties are allowed to bargain over all the surpluses generated by the "right" to be the first to make offers. The result obtained in the present paper may provide some "justification" for other division procedures such as the divide-and-choose or the moving-knife mechanisms.

Keywords: Bargaining Theory, Alternating Offers, First-Mover Advantage

JEL Classification: C78

Suggested Citation

Shy, Oz, Consistent Bargaining (February 27, 2010). Available at SSRN: https://ssrn.com/abstract=3083747 or http://dx.doi.org/10.2139/ssrn.3083747

Oz Shy (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Atlanta ( email )

1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States

HOME PAGE: http://https://www.frbatlanta.org/research/economists/shy-oz.aspx

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