Reputational Bargaining with Ultimatum Opportunities

We study two-sided reputational bargaining with opportunities to issue an ultimatum -- threats force dispute resolution. Each player is either a justified type, who never concedes and issues whenever opportunity arrives, or unjustified can concede, wait, bluff ultimatum. In equilibrium, the presence of harm benefit by decelerating accelerating reputation building. When only one ultimatum, equilibrium play unique. The hazard rate resolution discontinuous piecewise monotonic in time. As probabilities being vanish, agreement immediate efficient, if set justifiable demands rich, payoffs modify Abreu Gul (2000), discount replaced arrival former smaller. both players' arrive sufficiently fast, there may exist multiple equilibria which their reputations do not build up negotiation lasts forever.