Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2015-01-22
Number: 15-010/II
Author-Name: P. Jean-Jacques Herings
Author-Workplace-Name: Maastricht University, the Netherlands
Author-Name: Harold Houba
Author-Workplace-Name: VU University Amsterdam, the Netherlands
Title: Costless Delay in Negotiations
Abstract: We study strategic negotiation models featuring costless delay, general recognition procedures, endogenous voting orders, and finite sets of alternatives. Two examples show: 1. non-existence of stationary subgame-perfect equilibrium (SSPE). 2. the recursive equations and optimality conditions are necessary for SSPE but insufficient because these equations can be singular. Strategy profiles excluding perpetual disagreement guarantee non-singularity. The necessary and sufficient conditions for existence of stationary best responses additionally require either an equalizing condition or a minimality condition. Quasi SSPE only satisfy the recursive equations and optimality conditions. These always exist and are SSPE if either all equalizing conditions or all minimality conditions hold.
Classification-JEL: C72, C73, C78
Keywords: Bargaining, existence, one-stage-deviation principle, dynamic programming, recursive equations, Markov Decision Theory
File-Url: https://papers.tinbergen.nl/15010.pdf
File-Format: application/pdf
File-Size: 350628 bytes
Handle: RePEc:tin:wpaper:20150010