I revisit the Rubinstein (1982) model for the classic problem of price hag- gling and show that bargaining can become a “trap,” where equilibrium leaves one party strictly worse off than if no transaction took place (e.g., the equilibrium price exceeds a buyer’s valuation). This arises...

I revisit the Rubinstein (1982) model for the classic problem of price haggling and show that bargaining can become a "trap," where equilibrium leaves one party strictly worse off than if no transaction took place (e.g., the equilibrium price exceeds a buyer's valuation). This arises when one...

The paper studies bargaining games involving players with present-biased preferences. The paper shows that the relative timing of bargaining rewards and bargaining costs will determine whether the players’ present-bias will affect bargaining outcomes. In cases where players agree to a bargain...

We analyze a bargaining model where there is a long-term relationship between a seller and a buyer and there is bargaining over a sequence of surpluses that arrives at fixed points in time. Markov Perfect Equilibria are analyzed and equilibrium payoffs characterized. The transfers between the...

This paper shows that any attempt to deviate from the basic bargaining line is doomed to fail. The Cournot attempt results in undistributed pie, while the Rubinstein-Binmore one in insufficient distribution. Discount rate may be important to bargaining, but game theorists have not been...

This paper explores the possibility of privately inefficient job separations due to bargaining friction and its implications for the unemployment dynamics. I propose a simple specification of bargaining friction by including bargaining wedges in the standard Nash bargaining model. Such...

In alternating-offer bargaining, a seller is "stubborn" if she demands the same asking price more than once. We provide empirical evidence on stubbornness and inform the theoretical literature by analyzing millions of eBay bargaining threads taken from Backus et al. (2020). Focusing on the best...

In many bargaining situations, the distribution of seats or voting weights does not accurately reflect bargaining power. Maaser, Paetzel and Traub (Games and Economic Behavior, 2019) conducted an experiment to investigate the effect of such nominal power differences in the classic Baron-Ferejohn...