Pareto efficiency in the dynamic one-dimensional bargaining model
Journal of Theoretical Politics
Published online on June 16, 2015
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.