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Pareto efficiency in the dynamic one-dimensional bargaining model

Journal of Theoretical Politics

Published online on

Abstract

Pareto-dominated agreements are shown to prevail with positive probability in an open set of status quo in a Markov perfect equilibrium of a one-dimensional dynamic bargaining game. This equilibrium is continuous, symmetric, with dynamic preferences that satisfy the single-plateau property. It is also shown that there does not exist a symmetric equilibrium with single-peaked preferences.