An Alternative View of Uncertainty in Bilateral Bargaining Models with Incomplete Information

Abstract

This paper seeks to analyze the implications of relaxing the assumption of rationality by using incomplete information. Specifically, we want to analyze the implications on the uniqueness and existence of equilibrium when individuals form expectations with different distributions of all possible states. This is done by postulating an alternative view of uncertainty in decision making in economic interactions. Thus an alternative model of bilateral bargaining with incomplete information is formulated.