We consider a version of Rubinstein bargaining in which both parties p
ossess symmetric information about an asset's value, but the value may
change over time. When players can wait to learn new information befo
re responding to a given offer, each offer carries an implicit option
value. When the players are patient, it is optimal for them to make co
nservative offers to minimize the option value, but such offers are re
jected when the value of the asset increases. Multiple equilibrium out
comes also support the construction of further equilibria in which the
players wait many periods before making a serious offer. Unlike other
complete information models, waiting in our model is built from stati
onary asymmetric equilibria. In a limiting case, waiting can become ar
bitrarily long and the payoffs arbitrarily smalll. (C) 1994 Academic P
ress, Inc.