Abstract
We characterize the sequential equilibria of a class of infinite-horizon bargaining games with one-sided incomplete information. When the seller (the uninformed party) makes all the offers, we prove a folk theorem: every incentive compatible, individually rational, direct bargaining mechanism is implementable by sequential equilibria. Introducing buyer counteroffers eliminates outcomes which are unfavorable to that party. As the proportion of buyer offers increases, the set of implementable mechanisms shrinks continuously; when the proportion reaches one, only the single outcome most favorable to the buyer remains. Thus, depending on the offer structure, sequentiality may (or may not) impose restrictions beyond static incentive compatibility.
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