SFB 303 Discussion Paper No. A - 253

Author: Damme, Erik van, Reinhard Selten, and Eyal Winter
Title: Alternating Bid Bargaining with a Smallest Money Unit
Abstract: In a seminal paper, Ariel Rubinstein has shown that impatience implies determinateness of the 2-person bargaining problem. In this note we show that this result depends also on the assumption that the set of alternatives is a continuum. If the pie can be divided only in finitely many different ways, (for example, because the pie is an amount of money and there is a smallest money unit), any partition can be obtained as the result of a subgame perfect equilibrium if the time interval between successive offers is sufficiently small.
Creation-Date: September 1989
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