Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 0000-00-00
Number: 05-064/1
Author-Name: Harold Houba
Author-Email: hhouba@feweb.vu.nl
Author-Workplace-Name: Faculty of Economics, Vrije Universiteit Amsterdam
Title: Alternating Offers in Economic Environments
Abstract: This discussion paper resulted in an article in <I>Economics Letters</I> (2007). Vol. 96, pp. 316-324.<P>

The Nash bargaining solution of a modified bargaining problem in the contract space yields the pair of stationary subgame perfect equilibrium proposals in the alternating offers model, also for positive time between proposals. As time vanishes, convergence to the Nash bargaining solution is immediate by the Maximum Theorem. Numerical implementation in standard optimization packages is straightforward.
Classification-JEL: C72; C73; C78
Keywords: Bargaining; Negotiation; Alternating offers; subgame perfect equilibrium; Nash bargaining solution; Maximum Theorem; Applied General Equilibrium
File-Url: https://papers.tinbergen.nl/05064.pdf
File-Format: application/pdf
File-Size: 197654 bytes
Handle: RePEc:tin:wpaper:20050064