Document Type

Journal article

Source Publication

Games and Economic Behavior

Publication Date

5-1-2010

Volume

68

Issue

2

First Page

748

Last Page

762

Publisher

Elsevier

Keywords

Matching and bargaining, search frictions, two-sided incomplete, information, Diamond's paradox

Abstract

We study equilibria of a dynamic matching and bargaining game (DMBG) with two-sided private information bilateral bargaining. The model is a private information replica ofMortensen and Wright (2002). There are two kinds of frictions: time discounting and explicit search costs. A simple necessary and sufficient condition on parameters for existence of a nontrivial equilibrium is obtained. This condition is the same regardless whether the information is private or not. In addition, it is shown that when the discount rate is sufficiently small, the equilibrium is unique and has the property that every meeting results in trade.

DOI

10.1016/j.geb.2009.10.005

Print ISSN

08998256

E-ISSN

10902473

Publisher Statement

Copyright © 2009 Elsevier Inc.

Access to external full text or publisher's version may require subscription.

Full-text Version

Accepted Author Manuscript

Recommended Citation

Shneyerov, A., & Wong, A. C. L. (2010). Bilateral matching and bargaining with private information. Games and Economic Behavior, 68(2), 748-762. doi: 10.1016/j.geb.2009.10.005