In this paper, we analyze the class of all smooth separating sequential equilibria in a continuous-time bargaining model with two-sided uncertainty. Trade between players occurs whenever there is surplus to be shared and delay is used to signal their valuations. When the buyer and the seller have a common discount rate, we show that the final outcome is unique among all these equilibria: the difference between the highest possible buyer's valuation and the lowest possible seller's valuation always narrows down at a rate exactly equal to the discount rate. When their discount rates differ, the more patient side always reveals his valuation first in the unique smooth separating equilibrium. Key words: Bargaining, signaling, delay, two-sided uncertainty.

Graduate textbook presenting abstract models of bargaining in a unified framework with detailed applications involving economic, political and social situations.

Bargaining in the Shadow of the Market OCo Selected Papers on Bilateral and Multilateral Bargaining consists of selected research in bargaining carried out by Kalyan Chatterjee by himself and with various co-authors. Chatterjee has been one of the earliest researchers to work on noncooperative bargaining theory and has contributed to bilateral bargaining with parties having private information as well as multilateral coalition formation models. Some of his work in each of these areas finds place here.The main theme of this collection of papers is the nature of negotiations when participants have alternatives to continue negotiating, either by beginning negotiations with a different partner or set of partners or by engaging in time-consuming search for such partners. Chapters in this book include: a noncooperative theory of coalitional bargaining and features a laboratory experiment relevant to this theory as well as an extension to political negotiations, search for alternative partners, the effect of markets and bargaining on incentives of players to invest in the partnership and related papers on incentive compatibility, arbitration and a dynamic model of negotiation. The book also includes a new introduction that puts these papers in the context of the broader literature in the field.