Signaling bargaining power: Strategic delay versus restricted offers
I study the first-round separating equilibrium of a buyer-seller bargaining game, extended to allow for asymmetric information, strategically delayed offers and offers restricted to a portion of the good. When bargaining is over a consumption good, in equilibrium the "strong" buyer uses a restricted offer if his optimal consumption path is conservative relative to the "weak" buyer. A pure restricted offer may even be a costless, efficient signal. When the good is durable, a pure strategic delay is involved in signaling a strong bargaining position if the discount factor is high.
Year of publication: |
2000-04-14
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Authors: | Bac, Mehmet |
Published in: |
Economic Theory. - Springer. - Vol. 16.2000, 1, p. 227-237
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Publisher: |
Springer |
Saved in:
freely available
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