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Costless delay in negotiations

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Working paper
Author/s: 
P. Jean-Jacques Herings, Harold Houba
Issue number: 
2015.002
Series: 
GSBE
Publisher: 
Maastricht University
Year: 
2015
We study strategic negotiation models featuring costless delay, general recognition procedures, endogenous voting orders, and finite sets of alternatives. Two examples show 1. non-existence of stationary subgame-perfect equilibrium SSPE. 2. the recursive equations and optimality conditions are necessary for SSPE but insufficient because these equations can be singular. Strategy profiles excluding perpetual disagreement guarantee non-singularity. The necessary and sufficient conditions for existence of stationary best responses additionally require either an equalizing condition or a minimality condition. Quasi SSPE only satisfy the recursive equations and optimality conditions. These always exist and are SSPE if either all equalizing conditions or all minimality conditions hold.
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