Flexibility of disagreement actions in negotiations

Negotiation games in which two players engage in disagreement games to determine their payoffs during the bargaining generally admit multiple perfect equilibrium outcomes, including inefficient ones. This paper shows that if the two players cannot change their disagreement actions as frequently as they bargain, then the set of perfect equilibrium payoffs shrinks. As disagreement actions become completely inflexible relative to the bargaining frequency, the set of equilibrium payoffs shrinks to Nash's bargaining solution with strategic threat.