Abstract
This paper studies a one-shot, simultaneous-move bargaining game. Each bargainer makes a partial commitment (a share of the unit size cake that she would like to get), which can later be revoked at some cost to the player. The payoffs are defined, in part, by the Nash bargaining solution, where the feasible utility set is affected by the players' partial commitments. Under certain assumptions on the two cost-of-revoking functions, we establish that the model has a unique Nash equilibrium. It is shown that a player's equilibrium share of the cake is strictly increasing in her marginal cost of revoking a partial commitment. An application of our model selects a unique equilibrium in Nash's demand game.Journal of Economic LiteratureClassification Number: C78.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
