We examine an Outside Option Game in which player I submits a claim for a share of a cake while player II simultaneously either makes a claim or chooses to opt out. If player II opts out, then she receives an opt-out payment while player I receives nothing. If player II opts in and if the claims...

This paper characterizes modified evolutiona.rily stable strategies (MESSes) in Rubinstein's alternatingoffers, infinite- horizon bargaining game. The MESS concept modifies the idea of an neutrally stable strategy by favoring a simple strategy over a more complex strategy when both yield the...

This paper characterizes modified evolutionarily stable strategies (messes) in Rubinstein's alternating-offers, infinite-horizon bargaining game. The mess concept modifies the idea of a neutrally stable strategy by favoring a simple strategy over a more complex strategy when both yield the same...

The conventional wisdom that mobile operators are able to act as monopolists in pricing call termination on their networks has recently been challenged by Hutchison 3G’s entry into European mobile markets. The European Commission’s electronic communications regime allows national regulatory...

We examine an Outside Option Game in which player I submits a claim for a share of a cake while player II simultaneously either makes a claim or chooses to opt out. If player II opts out, then she receives an opt-out payment while player I receives nothing. If player II opts in and if the claims...

List prices are not completely credible as take it or leave it prices: buyers are able to seek reductions by bargaining with firms. We show that this realisation leads to the existence of a critical threshold number of competitors in an industry which depends on fundamentals. In industries with...

In this paper we study how bargainers impact on markets in which firms set a list price to sell to those consumers who take prices as given. The list price acts as an outside option for the bargainers, so the higher the list price, the more the firms can extract from bargainers. We find that an...

This paper analyses the implications of bargaining between buyers and sellers on the competitive outcome in a homogeneous good industry. Bargaining creates a competitive equilibrium in which some inefficient sellers coexist with efficient ones leading to productivity dispersion. Rival cost...

Negotiations often take long a time even if a delay in the agreement is inefficient. One typical explanation is the existence of private information of at least one party; the time is then a discriminating instrument. The paper starts by pointing out that this result does not hold once the...

Why do people stall while bargaining? Why are people keen to conclude a deal quickly, only to subsequently allow delay before the pie is realised? We propose that the reason is not fully explained by discount rates in combination with agents being engaged in a signalling equilibrium with...