Negotiation involves determining not only an agreement's price, but also its content, which typically has many aspects. We model such negotiations and provide conditions under which negotiation leads to efficient outcomes, even in the face of substantial asymmetric information regarding the...

This paper analyses the efficiency of the Texas shootout and ½-auction partnership dissolution mechanisms when one of the partners has a chance to observe the other partner's valuation. The efficiency of the Texas shootout mechanism positively depends on the probability of such observation...

Gale and Sabourian (2006) discuss the existence of inefficient Markov-perfect equilibrium (MPE) in a heterogeneous market. This paper shows that the example they provide cannot be supportedas a MPE. Indeed, with two buyers and two sellers, the dispersion of bargaining positions is not...

This paper analyzes the implications of bilateral bargaining over wages and employment between a producer and a union representing a finite number of identical workers in a monetary macroeconomic model of the AS--AD type with government activity. Wages and aggregate employment levels are set...

We here develop a model of pre-play communication that generalizes the cheap-talk approach by allowing players to have a lexicographic preference, second to the payoffs in the underlying game, for honesty. We formalize this by way of an honesty (or truth) correspondence between actions and...

In Young (1993, 1998) agents are recurrently matched to play a finite game and almost always play a myopic best reply to a frequency distribution based on a sample from the recent history of play. He proves that in a generic class of finite n-player games, as the mutation rate tends to zero,...

I prove an efficiency result for repeated games with imperfect public monitoring in which one player's utility is privately known and evolves according to a Markov process. Under certain assumptions, patient players can attain approximately efficient payoffs in equilibrium. The public signal...

This paper extends the Fishman (1988) model of preemptive jump bidding in private value takeover auction to auctions with common and affiliated values. We show that in the presence of a common value component, jump bidding equilibrium results in higher social surplus. Furthermore, we show that,...

This paper studies the problem of endogenous coalition formation in contests: how players organize themselves in groups when faced with the common objective of securing a prize by exerting costly effort. The model presented adopts an axiomatic approach by assuming certain properties for the...

We study efficiency properties of the irrevocable exit English auction in a setting with interdependent values. Maskin (1992) shows that the pairwise single-crossing condition is both necessary and sufficient for efficiency of the English auction with two bidders. This paper extends both...