Wernerfelt, Birger - In: Journal of Institutional and Theoretical Economics (JITE) 164 (2008) 2, pp. 211-229
We ask how bargainers' incentives to communicate about more efficient widget designs depend on whether they negotiate price prior to, or after, fixing the traded design. We find three effects: (1) Since communication reveals information about preferences, bargainers with little power prefer to...