Bester, Helmut; Sakovics, Jozsef - School of Economics, University of Edinburgh - 2004
We examine the commitment effect of delegated bargaining when the delegation contract is renegotiable. We consider a … renegotiation prevents a full elination of the commitment effect of delegation. Indeed, there are always gains from delegation when … the players are sufficiently patient. An extension to search market environment shows that the gains from delegation are …