Optimally Stubborn

Abstract

I consider a bargaining game with two types of players – rational and stubborn. Rational players choose demands at each point in time. Stubborn players are restricted to choose a bargaining strategy from a proper subset of strategies available to rational players. In the simplest case, stubborn players are restricted to choose from the set of “insistent” strategies that always make the same demand and never accept anything less. However, their initial choice of demand is unrestricted. I characterize the equilibria in this game, showing how the flexibility of the stubborn type changes equilibrium predictions.