Optimally stubborn. How long to hold and who will fold?
Abstract
I consider a model of reputational bargaining in which the stubborn type can choose their initial demand. There are two types of players: rational and stubborn. The game has two stages: a demand stage and a concession stage. Types can pool or separate in equilibrium for any fixed probability of facing a stubborn type. When the probability of facing a stubborn type is small, any feasible payoff can be achieved in equilibrium for either type. When the probability is large, there is either immediate agreement or long delays.
Fields of Study & Subjects
Game Theory and Applications
Game Theory and Voting Systems
Auction Theory and Applications
Publication details
- Journal / source
- Theoretical Economics
- Publisher
- The Econometric Society
- Volume
- 21
- Issue
- 2
- Pages
- 402–433
- Publication date
- 1 January 2026
- Language
- EN