Different Time Preferences and Non-Stationary Contracts in Negotiations

H.E.D. Houba, Q. Wen

    Research output: Contribution to JournalArticleAcademic


    When time preferences differ, non-stationary contracts strictly dominate stationary contracts. The unique equilibrium converges to the Nash bargaining solution in which the less patient player always receives 50% of his utopia payoff, regardless of the difference between the players' discount rates. © 2005 Elsevier B.V. All rights reserved.
    Original languageEnglish
    Pages (from-to)273-279
    JournalEconomics Letters
    Publication statusPublished - 2006


    Dive into the research topics of 'Different Time Preferences and Non-Stationary Contracts in Negotiations'. Together they form a unique fingerprint.

    Cite this