Stationary equilibria in bargaining with externalities

This paper studies infinite-horizon bargaining between a seller and multiple buyers when externalities are present. We extend the analysis in Jehiel & Moldovanu (1995a) by allowing for both pure and mixed equilibria. A characterization of the stationary subgame perfect equilibria in generic games is presented. Equilibria with delay exist only for strong positive externalities. Since each buyer receives a positive payoff when the seller makes an agreement with some other buyer, positive externalities induce a war of attrition between buyers.