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Two parties bargaining over a pie, the size of which is determined by their previous investment decisions. The … bargaining rule is sensitive to investment behavior. Two games are considered. In both, bargaining proceeds according to the Nash … behavior in the whole population both at the investment stage and at the distribution stage. A norm of investment and a norm of …
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In his article, Ewerhart argues that agents with inequity-averse preferences may overcome the hold-up problem. In this discussion, I focus on the underlying assumptions that he makes and point to some limitations of the model
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