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Econometrica
Article
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Article . 2018
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Econometrica
Article . 2018 . Peer-reviewed
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Research . 2017
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Research . 2017
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EconStor
Article . 2018
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Time Preferences and Bargaining

Time preferences and bargaining
Authors: Schweighofer-Kodritsch, Sebastian;

Time Preferences and Bargaining

Abstract

This paper presents an analysis of general time preferences in the canonical Rubinstein (1982) model of bargaining, allowing for arbitrarily history-dependent strategies. I derive a simple sufficient structure for optimal punishments and thereby fully characterize (i) the set of equilibrium outcomes for any given preference profile, and (ii) the set of preference profiles for which equilibrium is unique. Based on this characterization, I establish that a weak notion of present bias - implied, e.g., by any hyperbolic or quasi-hyperbolic discounting - is sufficient for equilibrium to be unique, stationary and efficient. Conversely, I demonstrate how certain violations of present bias give rise to multiple (non-stationary) equilibria that feature delayed agreement under gradually increasing offers.

Country
Germany
Related Organizations
Keywords

330, ddc:330, delay, Multistage and repeated games, bargaining, Individual preferences, dynamic inconsistency, Auctions, bargaining, bidding and selling, and other market models, time preferences, time preferences; dynamic inconsistency; alternating offers; bargaining; optimal punishments; delay, D03, D74, alternating offers, optimal punishments, C78

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    14
    popularity
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    Top 10%
    influence
    This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
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    impulse
    This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
14
Top 10%
Average
Top 10%
bronze