A1 Refereed original research article in a scientific journal
A characterization of a limit solution for finite horizon bargaining problems
Authors: Imai H, Salonen H
Publisher: SPRINGER HEIDELBERG
Publication year: 2012
Journal: International Journal of Game Theory
Journal name in source: INTERNATIONAL JOURNAL OF GAME THEORY
Journal acronym: INT J GAME THEORY
Volume: 41
Issue: 3
First page : 603
Last page: 622
Number of pages: 20
ISSN: 0020-7276
DOI: https://doi.org/10.1007/s00182-011-0306-6
Abstract
We investigate a two-person random proposer bargaining game with a deadline. A bounded time interval is divided into bargaining periods of equal length and we study the limit of the subgame perfect equilibrium outcomes as the number of bargaining periods goes to infinity while the deadline is kept fixed. This limit is close to the discrete Raiffa solution when the time horizon is very short. If the deadline goes to infinity the limit outcome converges to the time preference Nash solution. Regarding this limit as a bargaining solution under deadline, we provide an axiomatic characterization.
We investigate a two-person random proposer bargaining game with a deadline. A bounded time interval is divided into bargaining periods of equal length and we study the limit of the subgame perfect equilibrium outcomes as the number of bargaining periods goes to infinity while the deadline is kept fixed. This limit is close to the discrete Raiffa solution when the time horizon is very short. If the deadline goes to infinity the limit outcome converges to the time preference Nash solution. Regarding this limit as a bargaining solution under deadline, we provide an axiomatic characterization.
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