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Bargaining under incomplete information. (English) Zbl 0537.90102
A model of bilateral monopoly is considered where buyer and seller make offers b and s, transactions taking place if \(b\geq s\). Each agent knows his own reservation price and has a subjective probability over those of his opponent. A pair of bidding strategies (b or s as a function of reservation prices is an equilibrium if at each reservation price the offer prescribed by the strategy maximizes expected profit. Equilibria with additional smoothness properties are studied.
Reviewer: H.Keiding

91A12 Cooperative games
91B24 Microeconomic theory (price theory and economic markets)
91A05 2-person games
91A40 Other game-theoretic models
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