Report
Dynamic bargaining theory
Abstract: The goal of this paper is to extend the analysis of strategic bargaining to nonstationary environments, where preferences or opportunities may be changing over time. We are mainly interested in equilibria where trade occurs immediately, once the agents start negotiating, but the terms of trade depend on when the negotiations begin. We characterize equilibria in terms of simply dynamical systems, and compare these outcomes with the myopic Nash bargaining solution. We illustrate the practicality of the approach with an application in monetary economics.
Keywords: Game theory;
Access Documents
File(s): File format is application/pdf http://www.minneapolisfed.org/research/common/pub_detail.cfm?pb_autonum_id=453
Authors
Bibliographic Information
Provider: Federal Reserve Bank of Minneapolis
Part of Series: Staff Report
Publication Date: 1994
Number: 172