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First World Congress of the Game Theory Society (Games 2000)
July 24-28, 2000
Basque Country University and Fundacion B.B.V.
Bilbao, Spain

Organizers
Ehud Kalai, Federico Valenciano

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Issue-by-Issue Bargaining Models with Probability of Game Continuation
by
Francesca Flamini
University of Exeter

In this paper we investigate two-player two-issue bargaining games in which the probability to negotiate over the second issue depends on the agreement on the first issue. We analyse different functions of the probability of game continuation.

The main result is that for some specifications of the probability function, there is a subgame perfect equilibrium in which only on an issue is agreed. Therefore, the classic Rubinstein's model is robust to the possibility of negotiating on a second issue. Moreover, we prove that multiple subgame perfect equilibria can arise.

Date received: June 8, 2000

Copyright © 2000 by the author(s). The author(s) of this document and the organizers of the conference have granted their consent to include this abstract in Atlas Conferences Inc. Document # cafi-27.