Bargaining and the Right to Remain Silent

Abstract

This paper analyzes a class of alternating-offer bargaining gameswith one-sided incomplete information for the case of "no gap." Ifsequential equilibria are required to satisfy the additional restrictionsof stationarity, monotonicity, pure strategies, and no free screening,the authors establish the silence theorem: when the time intervalbetween successive periods is made sufficiently short, the informedparty never makes any serious offers in the play of alternating-offerbargaining games. A class of parametric examples suggests that thetime interval required to assure silence is not especially brief.Copyright 1992 by The Econometric Society.