Involuntary unemployment in a bargaining model when capacity choice is a binding precommitment
A market is studied where prices are formed through a bilateral bargaining process. players on one side of the market have in an initial stage the option to incur at a cost a binding precommitment which may limit the possible number of trades. it is shown that such a set-up does not necessarily lead...| Link(s) zu Dokument(en): | IHS Publikation |
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| Hauptverfasser: | , |
| Format: | IHS Series NonPeerReviewed |
| Sprache: | Englisch |
| Veröffentlicht: |
institut fuer hoehere studien
1988
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| Zusammenfassung: | A market is studied where prices are formed through a bilateral bargaining process. players on one side of the market have in an initial stage the option to incur at a cost a binding precommitment which may limit the possible number of trades. it is shown that such a set-up does not necessarily lead to market clearing. to solve the game a refinement of subgame perfection is used and under this extra requirement the sensitivity of bargaining behavior with respect to the specification of outside options is analysed. |
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