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- Title
Signaling bargaining power: Strategic delay versus restricted offers.
- Authors
Bac, Mehmet
- Abstract
Summary. 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.
- Subjects
ECONOMIC equilibrium; CONSUMPTION (Economics); PRODUCTIVITY bargaining
- Publication
Economic Theory, 2000, Vol 16, Issue 1, p227
- ISSN
0938-2259
- Publication type
Article
- DOI
10.1007/s001990050336