Option Values and Bargaining Delays

We consider a version of Rubinstein bargaining in which both parties possess symmetric information about an asset′s value, but the value may change over time. When players can wait to learn new information before responding to a given offer, each offer carries an implicit option value. When the play...

Full description

Saved in:
Bibliographic Details
Published in:Games and economic behavior 1994-09, Vol.7 (2), p.139-153
Main Authors: Avery, Christopher, Zemsky, Peter B.
Format: Article
Language:English
Subjects:
Bargaining
Economic equilibrium
Game theory
Citations: Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
cited_by cdi_FETCH-LOGICAL-c513t-847c3be41173f30d39d1bf120f1f935f8b5c4f76906d174338c3a756028b09d73
cites
container_end_page 153
container_issue 2
container_start_page 139
container_title Games and economic behavior
container_volume 7
creator Avery, Christopher
Zemsky, Peter B.
description We consider a version of Rubinstein bargaining in which both parties possess symmetric information about an asset′s value, but the value may change over time. When players can wait to learn new information before responding to a given offer, each offer carries an implicit option value. When the players are patient, it is optimal for them to make conservative offers to minimize the option value, but such offers are rejected when the value of the asset increases. Multiple equilibrium outcomes also support the construction of further equilibria in which the players wait many periods before making a serious offer. Unlike other complete information models, waiting in our model is built from stationary asymmetric equilibria. In a limiting case, waiting can become arbitrarily long and the payoffs arbitrarily small. Journal of Economic Literature Classification Number: 026.
doi_str_mv 10.1006/game.1994.1041
format article
fullrecord <record><control><sourceid>proquest_cross</sourceid><recordid>TN_cdi_proquest_miscellaneous_38708216</recordid><sourceformat>XML</sourceformat><sourcesystem>PC</sourcesystem><els_id>S0899825684710414</els_id><sourcerecordid>1312005950</sourcerecordid><originalsourceid>FETCH-LOGICAL-c513t-847c3be41173f30d39d1bf120f1f935f8b5c4f76906d174338c3a756028b09d73</originalsourceid><addsrcrecordid>eNp1kM9LwzAcxYMoOKdXz4OBt85vmqZJjjp_DQa7qNeQpt_OjK6tSTfYf2_qxIPg4RESPu_l8Qi5pjCjAPnt2mxxRpXK4jWjJ2REQUGSZoKdkhFIpRKZ8vycXISwAQCeChiR6arrXdtM3k29wzAxTTm5N35tXOOa9eQBa3MIl-SsMnXAq59zTN6eHl_nL8ly9byY3y0TyynrE5kJywrMKBWsYlAyVdKioilUtFKMV7LgNqtEriAvqcgYk5YZwXNIZQGqFGxMbo65nW8_Y5teb12wWNemwXYXNJMCZErzCE7_gJt255vYTVMWPwSuOERqdqSsb0PwWOnOu63xB01BD4vpYTE9LKaHxaJhcTR47ND-0og4gAXqvY6Fow5R3zZmXFQa1Q1PTGnKmf7otzFLHrMwDrZ36HWwDhuLpfNoe1227r8aX7O-h0I</addsrcrecordid><sourcetype>Aggregation Database</sourcetype><iscdi>true</iscdi><recordtype>article</recordtype><pqid>1312005950</pqid></control><display><type>article</type><title>Option Values and Bargaining Delays</title><source>International Bibliography of the Social Sciences (IBSS)</source><source>Backfile Package - Economics, Econometrics and Finance (Legacy) [YET]</source><creator>Avery, Christopher ; Zemsky, Peter B.</creator><creatorcontrib>Avery, Christopher ; Zemsky, Peter B.</creatorcontrib><description>We consider a version of Rubinstein bargaining in which both parties possess symmetric information about an asset′s value, but the value may change over time. When players can wait to learn new information before responding to a given offer, each offer carries an implicit option value. When the players are patient, it is optimal for them to make conservative offers to minimize the option value, but such offers are rejected when the value of the asset increases. Multiple equilibrium outcomes also support the construction of further equilibria in which the players wait many periods before making a serious offer. Unlike other complete information models, waiting in our model is built from stationary asymmetric equilibria. In a limiting case, waiting can become arbitrarily long and the payoffs arbitrarily small. Journal of Economic Literature Classification Number: 026.</description><identifier>ISSN: 0899-8256</identifier><identifier>EISSN: 1090-2473</identifier><identifier>DOI: 10.1006/game.1994.1041</identifier><language>eng</language><publisher>Duluth, MN: Elsevier Inc</publisher><subject>Bargaining ; Economic equilibrium ; Game theory</subject><ispartof>Games and economic behavior, 1994-09, Vol.7 (2), p.139-153</ispartof><rights>1994 Academic Press</rights><lds50>peer_reviewed</lds50><oa>free_for_read</oa><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c513t-847c3be41173f30d39d1bf120f1f935f8b5c4f76906d174338c3a756028b09d73</citedby></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktohtml>$$Uhttps://www.sciencedirect.com/science/article/pii/S0899825684710414$$EHTML$$P50$$Gelsevier$$H</linktohtml><link.rule.ids>314,780,784,3460,27924,27925,33224,45992</link.rule.ids><backlink>$$Uhttp://econpapers.repec.org/article/eeegamebe/v_3a7_3ay_3a1994_3ai_3a2_3ap_3a139-153.htm$$DView record in RePEc$$Hfree_for_read</backlink></links><search><creatorcontrib>Avery, Christopher</creatorcontrib><creatorcontrib>Zemsky, Peter B.</creatorcontrib><title>Option Values and Bargaining Delays</title><title>Games and economic behavior</title><description>We consider a version of Rubinstein bargaining in which both parties possess symmetric information about an asset′s value, but the value may change over time. When players can wait to learn new information before responding to a given offer, each offer carries an implicit option value. When the players are patient, it is optimal for them to make conservative offers to minimize the option value, but such offers are rejected when the value of the asset increases. Multiple equilibrium outcomes also support the construction of further equilibria in which the players wait many periods before making a serious offer. Unlike other complete information models, waiting in our model is built from stationary asymmetric equilibria. In a limiting case, waiting can become arbitrarily long and the payoffs arbitrarily small. Journal of Economic Literature Classification Number: 026.</description><subject>Bargaining</subject><subject>Economic equilibrium</subject><subject>Game theory</subject><issn>0899-8256</issn><issn>1090-2473</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>1994</creationdate><recordtype>article</recordtype><sourceid>8BJ</sourceid><recordid>eNp1kM9LwzAcxYMoOKdXz4OBt85vmqZJjjp_DQa7qNeQpt_OjK6tSTfYf2_qxIPg4RESPu_l8Qi5pjCjAPnt2mxxRpXK4jWjJ2REQUGSZoKdkhFIpRKZ8vycXISwAQCeChiR6arrXdtM3k29wzAxTTm5N35tXOOa9eQBa3MIl-SsMnXAq59zTN6eHl_nL8ly9byY3y0TyynrE5kJywrMKBWsYlAyVdKioilUtFKMV7LgNqtEriAvqcgYk5YZwXNIZQGqFGxMbo65nW8_Y5teb12wWNemwXYXNJMCZErzCE7_gJt255vYTVMWPwSuOERqdqSsb0PwWOnOu63xB01BD4vpYTE9LKaHxaJhcTR47ND-0og4gAXqvY6Fow5R3zZmXFQa1Q1PTGnKmf7otzFLHrMwDrZ36HWwDhuLpfNoe1227r8aX7O-h0I</recordid><startdate>19940901</startdate><enddate>19940901</enddate><creator>Avery, Christopher</creator><creator>Zemsky, Peter B.</creator><general>Elsevier Inc</general><general>Elsevier</general><general>Academic Press</general><scope>DKI</scope><scope>X2L</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>JRZRW</scope><scope>K30</scope><scope>PAAUG</scope><scope>PAWHS</scope><scope>PAWZZ</scope><scope>PAXOH</scope><scope>PBHAV</scope><scope>PBQSW</scope><scope>PBYQZ</scope><scope>PCIWU</scope><scope>PCMID</scope><scope>PCZJX</scope><scope>PDGRG</scope><scope>PDWWI</scope><scope>PETMR</scope><scope>PFVGT</scope><scope>PGXDX</scope><scope>PIHIL</scope><scope>PISVA</scope><scope>PJCTQ</scope><scope>PJTMS</scope><scope>PLCHJ</scope><scope>PMHAD</scope><scope>PNQDJ</scope><scope>POUND</scope><scope>PPLAD</scope><scope>PQAPC</scope><scope>PQCAN</scope><scope>PQCMW</scope><scope>PQEME</scope><scope>PQHKH</scope><scope>PQMID</scope><scope>PQNCT</scope><scope>PQNET</scope><scope>PQSCT</scope><scope>PQSET</scope><scope>PSVJG</scope><scope>PVMQY</scope><scope>PZGFC</scope><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope></search><sort><creationdate>19940901</creationdate><title>Option Values and Bargaining Delays</title><author>Avery, Christopher ; Zemsky, Peter B.</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c513t-847c3be41173f30d39d1bf120f1f935f8b5c4f76906d174338c3a756028b09d73</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>1994</creationdate><topic>Bargaining</topic><topic>Economic equilibrium</topic><topic>Game theory</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Avery, Christopher</creatorcontrib><creatorcontrib>Zemsky, Peter B.</creatorcontrib><collection>RePEc IDEAS</collection><collection>RePEc</collection><collection>CrossRef</collection><collection>Periodicals Index Online Segment 35</collection><collection>Periodicals Index Online</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - West</collection><collection>Primary Sources Access (Plan D) - International</collection><collection>Primary Sources Access &amp; Build (Plan A) - MEA</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - Midwest</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - Northeast</collection><collection>Primary Sources Access (Plan D) - Southeast</collection><collection>Primary Sources Access (Plan D) - North Central</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - Southeast</collection><collection>Primary Sources Access (Plan D) - South Central</collection><collection>Primary Sources Access &amp; Build (Plan A) - UK / I</collection><collection>Primary Sources Access (Plan D) - Canada</collection><collection>Primary Sources Access (Plan D) - EMEALA</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - North Central</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - South Central</collection><collection>Primary Sources Access &amp; Build (Plan A) - International</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - International</collection><collection>Primary Sources Access (Plan D) - West</collection><collection>Periodicals Index Online Segments 1-50</collection><collection>Primary Sources Access (Plan D) - APAC</collection><collection>Primary Sources Access (Plan D) - Midwest</collection><collection>Primary Sources Access (Plan D) - MEA</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - Canada</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - UK / I</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - EMEALA</collection><collection>Primary Sources Access &amp; Build (Plan A) - APAC</collection><collection>Primary Sources Access &amp; Build (Plan A) - Canada</collection><collection>Primary Sources Access &amp; Build (Plan A) - West</collection><collection>Primary Sources Access &amp; Build (Plan A) - EMEALA</collection><collection>Primary Sources Access (Plan D) - Northeast</collection><collection>Primary Sources Access &amp; Build (Plan A) - Midwest</collection><collection>Primary Sources Access &amp; Build (Plan A) - North Central</collection><collection>Primary Sources Access &amp; Build (Plan A) - Northeast</collection><collection>Primary Sources Access &amp; Build (Plan A) - South Central</collection><collection>Primary Sources Access &amp; Build (Plan A) - Southeast</collection><collection>Primary Sources Access (Plan D) - UK / I</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - APAC</collection><collection>Primary Sources Access—Foundation Edition (Plan E) - MEA</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><jtitle>Games and economic behavior</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Avery, Christopher</au><au>Zemsky, Peter B.</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Option Values and Bargaining Delays</atitle><jtitle>Games and economic behavior</jtitle><date>1994-09-01</date><risdate>1994</risdate><volume>7</volume><issue>2</issue><spage>139</spage><epage>153</epage><pages>139-153</pages><issn>0899-8256</issn><eissn>1090-2473</eissn><abstract>We consider a version of Rubinstein bargaining in which both parties possess symmetric information about an asset′s value, but the value may change over time. When players can wait to learn new information before responding to a given offer, each offer carries an implicit option value. When the players are patient, it is optimal for them to make conservative offers to minimize the option value, but such offers are rejected when the value of the asset increases. Multiple equilibrium outcomes also support the construction of further equilibria in which the players wait many periods before making a serious offer. Unlike other complete information models, waiting in our model is built from stationary asymmetric equilibria. In a limiting case, waiting can become arbitrarily long and the payoffs arbitrarily small. Journal of Economic Literature Classification Number: 026.</abstract><cop>Duluth, MN</cop><pub>Elsevier Inc</pub><doi>10.1006/game.1994.1041</doi><tpages>15</tpages><oa>free_for_read</oa></addata></record>
fulltext fulltext
identifier ISSN: 0899-8256
ispartof Games and economic behavior, 1994-09, Vol.7 (2), p.139-153
issn 0899-8256
1090-2473
language eng
recordid cdi_proquest_miscellaneous_38708216
source International Bibliography of the Social Sciences (IBSS); Backfile Package - Economics, Econometrics and Finance (Legacy) [YET]
subjects Bargaining
Economic equilibrium
Game theory
title Option Values and Bargaining Delays
url http://sfxeu10.hosted.exlibrisgroup.com/loughborough?ctx_ver=Z39.88-2004&ctx_enc=info:ofi/enc:UTF-8&ctx_tim=2025-01-05T02%3A36%3A05IST&url_ver=Z39.88-2004&url_ctx_fmt=infofi/fmt:kev:mtx:ctx&rfr_id=info:sid/primo.exlibrisgroup.com:primo3-Article-proquest_cross&rft_val_fmt=info:ofi/fmt:kev:mtx:journal&rft.genre=article&rft.atitle=Option%20Values%20and%20Bargaining%20Delays&rft.jtitle=Games%20and%20economic%20behavior&rft.au=Avery,%20Christopher&rft.date=1994-09-01&rft.volume=7&rft.issue=2&rft.spage=139&rft.epage=153&rft.pages=139-153&rft.issn=0899-8256&rft.eissn=1090-2473&rft_id=info:doi/10.1006/game.1994.1041&rft_dat=%3Cproquest_cross%3E1312005950%3C/proquest_cross%3E%3Cgrp_id%3Ecdi_FETCH-LOGICAL-c513t-847c3be41173f30d39d1bf120f1f935f8b5c4f76906d174338c3a756028b09d73%3C/grp_id%3E%3Coa%3E%3C/oa%3E%3Curl%3E%3C/url%3E&rft_id=info:oai/&rft_pqid=1312005950&rft_id=info:pmid/&rfr_iscdi=true