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Delay in a bargaining game with contracts

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Abstract

In a multilateral bargaining game where a proposer and responders can set up a “principal–agent” relationship by means of binding cash-offer contracts, we show that there is a Markov SPE with a delay in reaching an agreement. We also show that all the individually rational and efficient payoffs can be supported by SPE.

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Authors and Affiliations

  1. Department of Economics, Northwestern University, Evanston, IL, 60208, USA

    Yi-Chun Chen

  2. Institute of Economics, Academia Sinica, Taipei, 115, Taiwan, Republic of China

    Xiao Luo

  3. Department of Economics, National University of Singapore, Singapore, 117570, Singapore

    Xiao Luo

Authors
  1. Yi-Chun Chen
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  2. Xiao Luo
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Correspondence to Xiao Luo.

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Chen, YC., Luo, X. Delay in a bargaining game with contracts. Theory Decis 65, 339–353 (2008). https://doi.org/10.1007/s11238-008-9111-5

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  • DOI: https://doi.org/10.1007/s11238-008-9111-5

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