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 in a Changing World Order

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This book explores how the European Union responds to the ongoing challenges to the liberal international order. These challenges arise both within the EU itself and beyond its borders, and put into question the values of free trade and liberal democracy. 

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