Non- Cooperative bargaining Flashcards
(5 cards)
1
Q
What are three key elements of non-cooperative bargaining?
A
- Commitments and threats are important
- Risk aversion plays a role
- Some uncertainty but not info asymmetry
2
Q
What is the issue with the Nash demand game with certainty for divide the dollar?
A
- When Bob demands 0, Alice’s best response is to demand anything
- The same works vice versa
- NE is anywahere on pareto frontier
- There is also a Nash on 1,1 which is incompatible
3
Q
How do you find a Nash bargaining solution?
A
4
Q
HOw do you find the SPNE in a two stage ultimatum game?
A
5
Q
Who worked on infinite horizons in non cooperative bargaining and what did they find?
A
Rubenstein (1982)
30 years after introduction of NBS
Proved the relationship etween discount rate and bargaining power
