Template-type: ReDif-Paper 1.0
Author-Name: Herings P. Jean-Jacques 
Author-Name: Predtetchinski Arkadi 
Author-workplace-name: METEOR
Title: On the Asymptotic Uniqueness of Bargaining Equilibria 
Abstract: This note reexamines the connection between the asymmetric Nash bargaining solution and the equilibria of strategic bargaining games. Several papers in the literature obtain the asymmetric Nash bargaining solution as the unique limit of subgame perfect equilibria in stationary strategies when the breakdown probability approaches zero. This note illustrates by means of two examples that this result depends crucially on the differentiability of the boundary of the set of feasible payoffs. In the first example the game has a unique stationary subgame perfect equilibrium that fails to converge to the asymmetric Nash bargaining solution. In the second example the game has two stationary subgame perfect equilibria that converge to two distinct limits as the breakdown probability vanishes. This example demonstrates that without differentiability of the set of feasible payoffs there is not even asymptotic uniqueness of stationary equilibria in the bargaining model.
Keywords: microeconomics ; 
Series: Research Memoranda
Creation-Date: 2010
Number: 010
File-URL: http://arnop.unimaas.nl/show.cgi?fid=18341
File-Format: application/pdf
File-Size: 324051
Handle: RePEc:unm:umamet:2010010