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One-sided uncertainty and delay in reputational bargaining

Abreu, Dilip; Pearce, David G.; Stacchetti, Ennio - In: Theoretical economics : TE ; an open access journal in … 10 (2015) 3, pp. 719-773

A two-person infinite-horizon bargaining model where one of the players may have either of two discount factors, has a multiplicity of perfect Bayesian equilibria. Introducing the slightest possibility that either player may be one of a rich variety of stationary behavioral types singles out a...

Persistent link: https://www.econbiz.de/10011673276

Bilateral trade with a benevolent intermediary

Eilat, Ran; Pauzner, Ady - In: Theoretical economics : TE ; an open access journal in … 16 (2021) 4, pp. 1655-1714

We study intermediaries who seek to maximize gains from trade in bilateral negotiations. Intermediaries are players: they cannot commit to act against their objective function and deny, in some cases, trade they believe to be beneficial. This impairs their ability to assist the parties relative...

Persistent link: https://www.econbiz.de/10012806593

A simple status quo that ensures participation (with application to efficient bargaining)

Segal, Ilya; Whinston, Michael D. - In: Theoretical economics : TE ; an open access journal in … 6 (2011) 1, pp. 109-125

We consider Bayesian incentive-compatible mechanisms with independent types and either private values or interdependent values that satisfy a form of "congruence." We show that in these settings, interim participation constraints are satisfied when the status quo is the randomized allocation...

Persistent link: https://www.econbiz.de/10011695066

Informed intermediaries

Onuchic, Paula - In: Theoretical economics : TE ; an open access journal in … 17 (2022) 1, pp. 57-87

I develop a theory of intermediation in a market where agents meet bilaterally to trade and buyers cannot commit to payments. Some agents observe the past trading history of traders in the market. These informed agents can secure trades by punishing traders who previously defaulted. The...

Persistent link: https://www.econbiz.de/10012806606

Rhetoric in legislative bargaining with asymmetric information

Chen, Ying; Eraslan, Hülya - In: Theoretical economics : TE ; an open access journal in … 9 (2014) 2, pp. 483-513

We analyze a three-player legislative bargaining game over an ideological and a distributive decision. Legislators are privately informed about their ideological intensities, i.e., the weight placed on the ideological decision relative to the weight placed on the distributive decision....

Persistent link: https://www.econbiz.de/10011674460

Bargaining with evolving private information

Ortner, Juan - In: Theoretical economics : TE ; an open access journal in … 18 (2023) 3, pp. 885-916

I study how the arrival of new private information affects bargaining outcomes. A seller makes offers to a buyer. The buyer is privately informed about her valuation and the seller privately observes her stochastically changing cost of delivering the good. Prices fall gradually at the early...

Persistent link: https://www.econbiz.de/10014325243

Dynamic contracts when agent's quality is unknown

Prat, Julien; Jovanovic, Boyan - In: Theoretical economics : TE ; an open access journal in … 9 (2014) 3, pp. 865-914

We solve a long-term contracting problem with symmetric uncertainty about the agent's quality, and a hidden action of the agent. As information about quality accumulates, incentives become easier to provide because the agent has less room to manipulate the principal's beliefs. This result is...

Persistent link: https://www.econbiz.de/10011674079

Fragility of reputation and clustering of risk-taking

Ordoñez, Guillermo - In: Theoretical economics : TE ; an open access journal in … 8 (2013) 3, pp. 653-700

Reputation concerns in credit markets restrain borrowers' temptations to take excessive risk. The strength of these …

Persistent link: https://www.econbiz.de/10011685308

Dynamic signaling with stochastic stakes

Gryglewicz, Sebastian; Kolb, Aaron - In: Theoretical economics : TE ; an open access journal in … 17 (2022) 2, pp. 539-559

chooses whether to continue receiving a return that is an increasing function of both her reputation and an exogenous public …, and she builds a reputation by continuing when the stakes reach a new minimum. We discuss applications to corporate … reputation management, online vendor reputation, and limit pricing with stochastic demand. …

Persistent link: https://www.econbiz.de/10013273761

(Bad) reputation in relational contracting

Deb, Rahul; Mitchell, Matthew F.; Pai, Mallesh M. - In: Theoretical economics : TE ; an open access journal in … 17 (2022) 2, pp. 763-800

Motivated by markets for ''expertise,'' we study a bandit model where a principal chooses between a safe and risky arm. A strategic agent controls the risky arm and privately knows whether its type is high or low. Irrespective of type, the agent wants to maximize duration of experimentation with...

Persistent link: https://www.econbiz.de/10013273779

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