Bargaining with Absentmindedness
Fuente:
arXiv
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| Autore principale: | |
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| Natura: | Preprint |
| Pubblicazione: |
2025
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| Soggetti: | |
| Accesso online: | |
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| _version_ | 1866912949901197312 |
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| author | Wittbrodt, Cole |
| author_facet | Wittbrodt, Cole |
| contents | Delay is the norm in bargaining. I propose a novel source of bargaining delay: absentmindedness. Instead of interpreting absentmindedness as a literal memory friction, I use absentmindedness to represent a broader form of bounded rationality in dynamic games where players cannot perfectly track a game's progression. Bargainers unable to finely condition play on the stage of dynamic interaction can credibly refuse last-minute ultimatums. Other parties that anticipate this behavior are driven to offer preemptive concessions to avoid a breakdown in negotiations. Absentmindedness is thus a source of bargaining power, even for players who never make offers. This bargaining power comes at the cost of efficiency; I show that there can be equilibria where offers are rejected on the path of play. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2509_05828 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Bargaining with Absentmindedness Wittbrodt, Cole Theoretical Economics Delay is the norm in bargaining. I propose a novel source of bargaining delay: absentmindedness. Instead of interpreting absentmindedness as a literal memory friction, I use absentmindedness to represent a broader form of bounded rationality in dynamic games where players cannot perfectly track a game's progression. Bargainers unable to finely condition play on the stage of dynamic interaction can credibly refuse last-minute ultimatums. Other parties that anticipate this behavior are driven to offer preemptive concessions to avoid a breakdown in negotiations. Absentmindedness is thus a source of bargaining power, even for players who never make offers. This bargaining power comes at the cost of efficiency; I show that there can be equilibria where offers are rejected on the path of play. |
| title | Bargaining with Absentmindedness |
| topic | Theoretical Economics |
| url | https://arxiv.org/abs/2509.05828 |