Abstract
An infinite-horizon, dynamic bargaining model is presented in which actions affect the expected future value of the buyer–seller match. Because actions directly affect the future surplus to be bargained over, the model is unlike other models that tie the dynamic process to nature alone. Focusing on a subset of weak Markov equilibria, several results come about that are not found in static bargaining models using similar bargaining protocols. In particular, optimal price demands can be lower (higher) than the buyer's lowest (highest) possible valuation, and several empirical features concerning wage settlements and strike incidence from labor union contract negotiations can be explained.
Sign-in/Register to access full text options 
Free) 
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 call
