endogenous formation of coalitions in noncooperative games abstract in this paper we extend the definitions of coalition proof nash equilibrium and communication proof equilibrium to situations of partial communication then we use the model of endogenous formation of coalitions of aumann and myerson to find that one of these situations in which the corresponding equilibrium exists will be endogenously determined by the players in the game journal of economic literatureclassification numbers c70 c72

market heterogeneity and the determinants of paris apartment prices a quantile regression approach in this paper the heterogeneity of the paris apartment market is addressed for this purpose quantile regression is applied with market segmentation based on price deciles and the hedonic pri

the balance of power in rural marketing networks a case study of snake trading in cambodia abstract producers in small scale rural markets often receive unfavourable prices for their goods as a result of more powerful market participants this study uses a combination of price analysis and interview data to assess the position of snake hunters in the aquatic snake market from tonle sap lake in cambodia despite the hunters dependence on intermediary traders for market access and credit the evidence implies that they are not powerless participants intermediary traders operate under high competition as a result of the increasing scarcity of snakes and therefore despite interlocked credit and snake markets offer relatively high prices to hunters

asymmetric fdi and tax treaty bargaining theory and evidence abstract tax treaties are often viewed as a mechanism for eliminating tax competition however this approach ignores the need for bargaining over the treaty s terms this paper focuses on how bargaining can affect the withholding taxes set under the treaty in a simple framework we develop hypotheses about patterns in treaty tax rates a key determinant for these patterns is the relative size of bilateral foreign direct investment fdi activity in plausible situations more asymmetric countries will negotiate treaties with higher tax rates this theory is then tested using 1992 data from us and organization for economic cooperation and development oecd bilateral tax treaties overall the data supports the prediction that greater asymmetric fdi activity increases the negotiated tax rates

tariff retaliation versus financial compensation in the enforcement of international trade agreements the authors analyze whether financial compensation is preferable to the current system of dispute settlement in the world trade organization that permits member countries to impose retaliatory tariffs in response to trade violations committed by other members they show that monetary fines are more efficient than tariffs in terms of granting compensation to injured parties when there are violations in equilibrium however fines suffer from an enforcement problem since they must be paid by the violating country if fines must ultimately be supported by the threat of retaliatory tariffs they fail to yield a more cooperative outcome than the current system the authors also consider the use of bonds as a means of settling disputes if bonds can be posted with a third party they do not have to be supported by retaliatory tariffs and can improve the negotiating position of countries that are too small to threaten tariff retaliation

enforcing international trade agreements with imperfect private monitoring to analyse the role that the world trade organization wto plays in enforcing international trade agreements this paper first explores what countries can achieve alone by characterizing optimal private trigger strategies pts under which each country triggers a punishment phase by imposing an explicit tariff based on privately observed imperfect signals of the other country s concealed trade barriers it identifies the condition under which countries can restrain the use of concealed barriers based on pts and establishes that countries will not reduce the cooperative protection level to its minimum attainable level under the optimal pts this paper then considers third party trigger strategies tts under which the wto allows each country to initiate a punishment phase based on the wto s judgement about potential violations by comparing the optimal pts and optimal tts it demonstrates that the wto facilitates a better cooperative equilibrium by changing the nature of punishment triggering signals from private to public which in turn enables countries to use a more efficient punishment such as an asymmetric and a minimum punishment

do big countries win tariff wars yes it is widely believed that tariffs invite retaliation and that the postretaliation equilibrium l eaves all countries worse off than they would be at free trade the a uthors present a simple pure exchange model with two countries and t wo goods and show which endowment patterns are consistent with this belief they find that if one country is substantially bigger than th e other it can expect to gain from a tariff war despite retaliation the model can be extended to show that the advantage obtained by bei ng part of a large trading unit can help explain the formation of cus toms unions copyright 1988 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

some recent results in bargaining theory two person bargaining situations are very frequent in economic life among the most natural examples one can think of wage negotiations between an employer and a person he wishes to hire another example at a more aggregate level concerns wage renegotiations that take place periodically in large firms between the manager and the workers representative as a final example let me mention the simple and very usual situation of a seller and a potential buyer who bargain over the price of some indivisible object unlike for competitive markets economic theory and especially mathematical economics has not until recently been very helpful in explaining how prices are determined in these bargaining situations the usual explanations refer to a vague notion of respective bargaining powers of the two agents there is a clear need to precise the relations between this mysterious notion and quantifiable economic data like preferences what bargainers can get in case of an agreement outside options what they can get if agreement fails impatience risk aversion and finally information of bargainers about each other after the seminal contributions of hicks and zeuthen in the thirties john nash 1950 1953 was the first to adopt in the early fifties a systematic theoretical approach to the bargaining problem nash introduced a distinction between the axiomatic or normative approach on the one hand and the strategic or positive approach on the other hand of course the two approaches must not be viewed as independent what has come to be known as the nash program can be described as follows starting from an axiomatic solution having desirable normative properties like the solution proposed by nash himself is it possible to design a particular bargaining process that would naturally lead rational negotiators to the outcome prescribed by the axiomatic solution behind the word rational hides the main difficulty of this program find a satisfactory concept of non cooperative equilibrium for bargaining games

estimating a market equilibrium search model from panel data on individuals from albrecht and axell 1984 and is based on workers who are homogeneous in terms of market productivity and heterogeneous in terms of nonmarket productivity and on firms which are heterogeneous in terms of productive efficiency the equilibrium model is contrasted in terms of its fit to the data with an unrestricted version of the model which is based on a mixture of negative binomial distributions the equilibrium model fails to conform to the data in exactly the dimension of its major focus namely it implies that measurement error accounts for almost all of the dispersion in observed wages the equilibrium model also does not do well in fitting the unemployment duration distribution compared to the unrestricted model the problem is that the duration distribution itself does not support the existence of significant heterogeneity as evidenced by the estimates of the unrestricted model the paper also illustrates the use of such models for policy analysis by simulating the welfare effects of a minimum wage

outside options and the failure of the coase conjecture a buyer wishes to purchase a good from a seller who chooses a sequence of prices over time each period the buyer can also exercise an outside option abandoning their search or moving on to another seller we show there is a unique equilibrium in which the seller charges a constant price in every period equal to the monopoly price contravening the coase conjecture we then embed the singleseller model into a search framework and show the result provides a foundation for the usual no haggling assumption jel c78 d42 d43 l12 l13 the coase conjecture is a cornerstone of modern microeconomic theory informing monopoly theory and providing a canonical example of the problem of commitment the idea is that for any given price high value buyers are more likely to purchase than low value buyers leading to negative selection in the demand pool accordingly the seller cuts its price over time causing high value buyers to delay their purchases the seller s inability to commit thus leads its later selves to exert a negative externality on its former selves reducing its overall profit gul sonnenschein and wilson 1986 this idea of negative selection is robust versions of it hold when costs are nonlinear kahn 1986 when goods depreciate over time bond and samuelson 1984 when there is entry of new buyers sobel 1991 and when the buyers face future competition fuchs and skrzypacz 2010 in this article we show that the coase conjecture fails in a natural environment where buyers have an outside option they can choose to exercise we consider a seller who faces a buyer or a continuum of buyers with unknown value for the good and unknown outside option each period the seller chooses price p t the buyer then chooses to buy wait or exercise his option and terminate the game the outside option may come from the possibility of buying another product for example when waiting for the price of the iphone to fall a customer could instead buy a comparable phone from a competitor similarly when bargaining over the price of a car a buyer may abandon negotiations and move on to the next dealer the outside option may also come from pursuing other objectives once the negotiation has terminated for example after he finishes bargaining at a bazaar a tourist could start seeing local attractions

bargaining and waiting until recently the final word on bargaining with full information had been rubinstein s 1982 seminal work which concluded that an agreement will be reached immediately and the first mover will have the advantageous share rubinstein s model was one of alternating offers made at fixed time intervals many variations of the model have emerged and until recently they mainly focus on asymmetric information with some having the uninformed agent making all the offers the conclusion from examining these variations is that the equilibrium is highly sensitive to the exact specification of the institutional structure in more recent work perry and reny 1990 perry and reny 1993 sakavics 1993 and nickerson sadanand and sadanand 1994 endogenize the structure of the bargaining by allowing the order and timing of play to be determined endogenously the first three papers endogenous structure models deal with the full information setting and the last is an asymmetric information model 2 in addition to the exogenously given minimum reaction time for responding to offers made by the other player the endogenous structure models introduce the important innovation of an exogenous waiting time a time between a player s offer and his next offer they also allow players to make simultaneous offers which sakovics later disallows the findings in this recent literature are rather startling i the waiting time has a profound impact the longer the time the greater the share the player can command 3 ii the consequence of simultaneous offers is multiple equilibria when the reaction time is zero a continuum of shares lying between the two unique rubinstein shares can result and additional continua of shares arise with delayed agreement when the reaction times are positive iii equilibrium paths are almost exclusively characterized by simultaneous offers in this paper we examine the question of simultaneous offers and reconcile the conflict between the infrequency of simultaneous offers in real life bargaining and their prevalence in the endogenous structure models we

housing submarkets and the lattice of substitution this paper aims to stimulate interest in the early micro economic conceptualisation of housing submarkets proposed by rapkin and grigsby which defined market areas in terms of dwelling substitutability three key questions need to be addressed if a return to the rapkin grigsby approach is to be achievable and worthwhile first what are the practical benefits the paper highlights a range of potential research applications that would benefit from the substitutability approach secondly in what way are existing approaches likely to be inadequate for demarcating substitutability based submarkets four criteria are proposed for assessing submarket estimation methods which existing approaches fail to satisfy thirdly what are the prospects for developing a substitutability metric that will make the rapkin grigsby definition empirically feasible a new measure is proposed based on the cross price elasticity of price cpep which is illustrated using data for glasgow scotland

the excess sensitivity of layoffs and quits to demand excessive layoffs in bad times and excessive quits in good times both stem from the same weakness in practical employment arrangements the specific nature of worker firm relations creates a situat

bilateral trading as an efficient auction over time a market composed of pairwise trading under incomplete information is modeled in order to analyze how resources are allocated among competing uses when information about trade gains is incomplete contrary to the results from studying a single such trade sufficient homogeneity across potential trades guarantees that efficiency obtains this is analogous to simple first price auctions with homogeneous bidders where bidders have a common bid function and as a result the high bidder also places the highest value on the auctioned object with enough symmetry the decentralized bilateral trades in the present model occur as if they were made in a first price auction that occurs through time the robustness of the efficiency result to heterogeneities among agents and to nontrivial search intensity decisions is then considered

modelling spatial structures in local housing market dynamics a multilevel perspective there has been a long history of research into the development and estimation of hedonic house price models there is however a discrepancy between the empirical and theoretical approaches to this research a major issue lies in the integration of the conceptual and theoretical models of local housing markets with the context insensitive nature of the standard hedonic model specification this paper explores this inconsistency by using multilevel modelling to move towards a more empirically and conceptually appealing specification of the hedonic house price model it uses price data from cardiff to investigate how a multilevel approach can explicitly incorporate the spatial structures of housing market dynamics and the ad hoc nature of the valuation process the paper concludes that successful empirical analysis depends upon a clear theoretical understanding of the processes under investigation

on the role of retaliation in trade agreements this paper analyzes the role of retaliation in trade agreements it shows that in the presence of private information retaliation can always be used to increase the welfare derived from such agreements by the participating governments in particular it is shown that retaliation is a necessary feature of any efficient equilibrium we argue that retaliation would not be necessary if governments could resort to international transfers or export subsidies to compensate for terms of trade externalities within the current world trading system though in which transfers are seldom observed whereas export subsidies are prohibited the use of the remaining trade instruments in a retaliatory fashion might be optimal the model is used to interpret the retaliatory use of antidumping observed in the last decades and the proliferation of these measures relative to other trade remedies

strategic delay in bargaining with two sided uncertainty the role of strategic delay is analyzed in an infinite horizon alternating offer model of bargaining a buyer and seller are engaged in the trade of a single object both bargainers have private information about their own preferences and are impatient in that delaying agreement is costly an equilibrium is constructed in which the bargainers signal the strength of their bargaining positions by delaying prior to making an offer a bargainer expecting large gains from trade is more impatient than one expecting small gains and hence makes concessions earlier on trade occurs whever gains from trade exist but due to the private information only after costly delay panmunjom korea upi the american general and the north korean general glared at each other across the table and the only sound was the wind howling across the barren hills outside their hut maj gen james b knapp negotiator for the united nations command unc was waiting for maj gen ri choonsun of the democratic people s republic of north korea to propose a recess they sat there arms folded for 42 hours not a word finally gen ri got up walked out and drove away evening bulletin philadelphia 11 april 1969

dynamic bargaining with transaction costs a buyer and seller alternate making offers until an offer is accepted or someone terminates negotiations the seller s valuation is common knowledge but the buyer s valuation is known only by the buyer impatience to reach an agreement comes from two sources the traders discount future payoffs and there are transaction costs of bargaining equilibrium behavior involves either immediate trade delayed trade or immediate termination depending on the size of the gains from trade and the relative bargaining costs this contrasts with the pure discounting model where termination never occurs and the pure transaction cost model where delayed trade never occurs

optimal labour contracts under asymmetric information an introduction the review of economic studies has instituted a new series of lectures to be given annually by a younger british economist at the association of university teachers of economics meetings the choice of lecturer is determined by a panel whose members are currently professors hahn mirrlees and nobay this paper is a revised version of the first lecture in the series it was presented at the aute meeting held at the university of surrey in april 1982 and was refereed in the usual way mak

conditional versus unconditional trade concessions for developing countries we consider a small open economy that faces a commitment problem in trade liberalization we examine how the relationship with a large trading partner affects the ability of the small countrys government to sustain free trade through a reputational mechanism if the small country s government is patient enough it can overcome its domestic commitment without the help of the large country unconditional liberalization by the large trading partner has an ambiguous effect on the small country s dynamic incentives liberalization through a reciprocal trade agreement in which the large country lowers its tariffs conditionally on the small country doing the same unambiguously dominates unconditional liberalization by the large country as a way of boosting trade reforms and reinforcing policy credibility in the small country however if capacity in the import competing sector can only be reduced gradually a conditional reciprocal agreement may require an asynchronous exchange of concessions with the large country liberalizing before the small country

domestic policies in self enforcing trade agreements abstract if all cross country externalities travel through the terms of trade efficient trade agreements may simply target the terms of trade and ignore domestic policies this argument has been advanced by several prominent studies simply put it reads terms of trade agreements are efficient i show that this result breaks down if the following two standard conditions are met first a self enforcement requirement constrains the agreement and second production possibilities are intertemporally linked these conditions imply that a country s current policy mix affects future production possibilities and thus impacts payoffs under potential defection since a terms of trade agreement does not specify a country s policy mix it effectively invites countries to manipulate their own defection temptation to be self enforcing terms of trade agreement must ensure that no country while optimizing its policies on the iso terms of trade schedule will abandon its zone of voluntary cooperation this requirement implies that terms of trade agreements are inefficient and can be improved upon by agreements that target policies directly

the dynamics of intraurban quantile house price indexes estimating price indexes for different quantiles shows how prices vary for homes that are in different stages of the filtering process the paper describes a filtering model and its implication for the dynamic interaction of housing prices at these various stages a time series analysis of quantile price indexes for three municipalities near chicago supports the predictions of the filtering model

the dynamics of pretrial negotiation it is shown that many cases proceed to court despite ample opportunity for interaction and much of the settlement takes place on the courthouse steps the deadline effect when fixed costs of bargaining are introduced a u shaped pattern of settlement appears with a greater chance of settlement at the beginning and at the end of negotiations than in the middle these characteristics persist even as the time between offers approaches zero the theoretical predictions are consistent with the stylized facts a large proportion of the lawsuits that are settled out of court are settled very close to the trial date or in the first several days of the trial 3 although the deadline effect appears in many other settings as well it has little theoretical support 4

tolerance of arrearages how imf loan policy can effect debt reduction a model of bargaining with asymmetric information is applied to the case of sovereign debt and imf intervention debtors and creditors are assumed to bargain over the price to be paid by the debtors for their outstanding debt and the ability of the debtors to delay an agreement is private information it is shown that an imf policy of no lending in arrears increases the price of the debt increases any delay to agreement and increases the likelihood that the creditor will demand the highest price an imf policy of lending in arrears in contrast decreases the price of the debt decreases the delay time to agreement and my increase the likelihood that the creditor accepts the lowest price as it shifts the locus of bargaining power predictions of the model are consistent with results from recent debt agreements and implications for current debate on debt reduction strategies are discussed

farm gate tomato price negotiations under asymmetric information this article provides an empirical analysis of farm gate tomato price negotiations under asymmetric information regression models are estimated to analyze when and by how much sellers stick to their initial ask prices and what explains the variation in the initial ask offer price spread detailed information on 66 farm gate tomato transactions and daily tomato wholesale price data from the central vegetable market in addis ababa are used for the analysis estimation results show that farmers are less committed to their initial ask price when the buyer speaks out the transaction price first when their quality perceptions of the tomatoes being transacted differ from those of the buyers and when their tomato farm is at a large distance from the main road sellers stick more to their initial ask price when they know that the central market price is high the initial ask offer price spread decreases when the buyer speaks out the initial negotiation price first but increases in the difference in quality perception between buyer and seller and in the quantity of tomatoes being transacted

international trade agreements between countries of asymmetric size abstract this paper analyzes how changes in the structure and environment of trade agreements between a small and a large country affect the efficient frontier of those self enforcing agreements and hence negotiation outcomes using the autarky punishment instead of the interior nash punishment may provide the small country with greater bargaining power negotiating direct transfers under free trade instead of reciprocal tariff reductions improves the worst possible negotiation outcome for the small country the existence of irreversible investment may strengthen weaken the small country s bargaining power under the interior nash autarky punishment scheme

does hierarchical governance facilitate adaptation to changed circumstances abstract the transaction cost theory of economic organization maintains that by merging and adopting a hierarchical governance structure two firms can circumvent the bargaining problem which would impede adaptation to changing circumstances if they remained independent i analyze this claim in a simple model which allows the costs of hierarchical organization imperfect selective intervention to be evaluated alongside the costs due to the bargaining problem delays and disagreement both costs are due to informational asymmetries which are assumed to be unaffected by the choice of governance structure examples are presented which support the fundamental transaction cost proposition that hierarchical governance is preferred when parties are highly interspecific and there are significant gaps in the contract the intuition is that rational bargainers make less attractive offers in precisely those circumstances where adaptation is likely to be extremely valuable integration effectively separates the decision to adapt from the division of the resulting surplus and so is relatively efficient when substantial quasi rents are at stake

rationalist explanations for war realist and other scholars commonly hold that rationally led states can and sometimes do fight when no peaceful bargains exist that both would prefer to war against this view i show that under very broad conditions there will exist negotiated settlements that genuinely rational states would mutually prefer to a risky and costly fight popular rationalist and realist explanations for war fail either to address or to explain adequately what would prevent leaders from locating a less costly bargain essentially just two mechanisms can resolve this puzzle on strictly rationalist terms the first turns on the fact that states have both private information about capabilities and resolve and the incentive to misrepresent it the second turns on the fact that in specific strategic contexts states may be unable credibly to commit to uphold a mutually preferable bargain historical examples suggest that both mechanisms are empirically plausible

cost of living adjustment clauses in union contracts a summary of results our paper provides an explanation why cost of living adjustment cola provisions and their characteristics vary widely across u s industries we develop models of optimal risk sharing between a firm and union to investigate the determinants of a number of contract characteristics these include the presence and degree of wage indexing the magnitude of deferred noncontingent wage increases contract duration and the trade off between temporary layoffs and wage indexing preliminary empirical tests of some of the implications of the model are described one key finding is that the level of unemployment insurance benefits appears to influence the level of layoffs and the extent of cola coverage simultaneously

a non cooperative bargaining model with strategically timed offers abstract rubinstein s alternating offers bargaining model is enriched by allowing players to choose when and whether or not to make an offer time is continuous and players make offers whenever they wish it is assumed that upon making an offer players must wait a fixed amount of time before making another it is shown that if players can react arbitrarily quickly to their opponent s offers then all subgame perfect equilibrium outcomes are rubinstein like in particular efficient however if it takes time to react then some delay can be supported this potential delay becomes arbitrarily large as reaction times increase journal of economic literature classification numbers c78 c72

sequential bargaining with correlated values the paper analyzes an infinite horizon sequential bargaining game with one sided offers between a buyer and a seller when the buyer s valuation depends on the seller s the seller knows the value of the object and the buyer does not the influence of relative discount factors on the solution is studied it is shown for example that an impasse may result if the buyer offeror is too impatient relative to the seller the buyer makes a single take it or leave it offer

are trade blocs conducive to free trade is integration conducive to free trade equilibria in the context of an infinitely repeated tariff setting game with intraindustry trade integration of numerous very small provinces promotes free trade by deterring the exercise of market power by a large dominant province if the dominant province is smaller than the rest of the world combined integration promotes free trade if it results in multiple equal sized blocs free trade is less likely the higher the degree of integration in such a world but it is always more likely than in a world with one very dominant trading partner

is there a case for non discrimination in the international protection of intellectual property abstract we evaluate the case for non discrimination in international patent protection when trade is not subject to any frictions barriers requiring national treatment nt does not affect the rate of innovation and welfare since unfavorable discrimination suffered abroad by innovators in the absence of nt is fully offset by favorable discrimination enjoyed by them at home when trade barriers exist however such international offsetting in patent protection is incomplete and innovation incentives are actually lower under nt by lumping domestic and foreign patent protection together nt blunts the overall effectiveness of patent protection in incentivizing innovation in the presence of trade barriers

labor reallocation over the business cycle new evidence from internal migration this article establishes the cyclical properties of a novel measure of worker reallocation long distance migration rates within the united states combining evidence from a number of data sets spanning the entire postwar era we find that internal migration within the united states is procyclical this result cannot be explained by cyclical variation in relative local economic conditions suggesting that the net benefit of moving rises during booms migration is most procyclical for younger labor force participants therefore cyclical fluctuations in the net benefit of moving appear to be related to conditions in the labor market and the spatial reallocation of labor

size inequality coordination externalities and international trade agreements abstract developing countries now account for a significant fraction of world trade and two thirds of the membership of the world trade organization wto however many are still individually small and thus have a limited ability to bilaterally extract and enforce trade concessions from larger developed economies even though as a group they would be able to do so we show that this coordination externality generates asymmetric outcomes under agreements that rely on bilateral threats of trade retaliation such as the wto but not under agreements extended to include certain financial instruments in particular we find that an extended agreement generates improvements in global efficiency and equity if it includes the exchange of bonds prior to trading but not if it relies solely on ex post fines moreover a combination of bonds and fines generates similar improvements even if small countries are subject to financial constraints that prevent them from posting bonds

strategic bargaining models and interpretation of strike data attrition screening and signalling models of strategic bargaining are characterized in terms of their predictions about the incidence mean duration and settlement rates of strikes and the terms of wage settlements these predictions are compared with the general features observed in empirical studies of strikes in canada and the united states conclusions are drawn about the types of models capable of generating these features and about the conformity of the models to the evidence methods are described for computing the numerical examples used to illustrate the models

strategic competition in the asian mega regionalism and optimal choices the strategic interactions of mega regional blocs such as the trans pacific partnership tpp the regional comprehensive economic partnership and even the one belt and one road obor in the asia pacific reflects the dual purposes of large countries as they seek not only the welfare gains from trade liberalisation but also the leadership in a trading bloc or the right to set the rules this paper designs two sequential network formation games a leadership game and a trade liberalisation game to model this phenomenon and predict the equilibrium result in the first game we show how the incorporation of leadership affects the choices among different trading structures specifically we show that the parallel trading blocs emerge as the equilibrium outcome only when there exists large loss from giving up leadership in the second game we describe how the globalisation is arrived and conduct numerical simulations to test our theoretical results the predictions of the game are supported by the real world data based on simulation results

multi lateral trade negotiations and the most favored nation clause abstract this paper considers the interaction between private information and the most favored nation clause in trade negotiations it demonstrates that by aggregating uncertainty over a number of trading partners the most favored nation clause may offer a welfare improvement over a set of bilateral trade negotiations this improvement is shown to be most pronounced when a large number of countries are involved in negotiations

wage bargaining labor turnover and the business cycle a model with asymmetric information this paper presents a wage bargaining model in which the employer and employee are each uncertain about the other s reservation wage under specified circumstances the model s equilibrium is shown to involve unilateral wage setting and inefficient labor turnover in addition aggregate demand shocks affect the equilibrium in a way that produces procyclical quits and countercyclical layoffs these results are obtained without resorting to assumptions of nominal wage rigidity long term contracting or aggregate price misperceptions

strategic delay in bargaining this paper analyses a bargaining model with incomplete information in which the time between offers is an endogenous strategic variable we find equilibria involving a delay to agreement that is due to the use of strategic time delay by bargainers to signal their relative strength under some specifications of the parameters delay is present in the unique sequential equilibrium whose beliefs satisfy one intuitive restriction this delay does not vanish as the minimal time between offers becomes small