Working Paper No. 692

Immediate Agreement in Interdependent Bilateral Bargaining

Published: January 25, 2007Pages: 27Keywords: Bilateral Oligopoly; Intermediate Goods; Bargaining; Market Network; Trade LinkJEL-codes: C70; D20; D40; L10; L40

Immediate Agreement in Interdependent Bilateral Bargaining Jonas Björnerstedt and Johan Stennek


This note provides sufficient conditions for immediate agreement in an extensive form model of interdependent bilateral bargaining. The model is suggested by Björnerstedt and Stennek (2006) as a work horse for studying bilateral oligopoly. The key feature of this model is that the firms are represented by separate agents in all negotiations in which they are involved. There is immediate agreement in equilibrium, essentially if production is strictly convex or if the agents use Markov strategies.

 

Interdisciplinary European Studies

The European Union and the Return of the Nation State

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This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

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