Shinsuke Kambe

Nuffield College, Oxford University


October 1994



We study the effect of imperfect commitment in non-cooperative two-person bargaining games. Either by establishing reputation to be uncompromising or by inborn stubborness, a players sometimes commits to her initial demand, becoming unable to change her demand or to accept the opponent's offer inferior to it. When the probability to be uncompromising is small, the set of equilibria is shown to be small. A player has higher bargaining power when she is more patient and/or is more likely to be uncompromising. The bargaining outcome is insensitive to the form of bargaining procedure as long as offers are made frequently.