Bargaining with Deadlines and Private Information-Reference-Cited by-同舟云学术

Bargaining with Deadlines and Private Information

Published:2013-11-01 Issue:4 Volume:5 Page:219-243
ISSN:1945-7669
Container-title:American Economic Journal: Microeconomics
language:en
Short-container-title:American Economic Journal: Microeconomics

Author:

Fuchs William¹,Skrzypacz Andrzej²

Affiliation:

1. Haas School of Business, University of California Berkeley, 545 Student Services Building, Berkeley, CA 94720.

2. Stanford University, Graduate School of Business, 518 Memorial Way, Stanford, CA 94305.

Abstract

We study dynamic bargaining with private information and a deadline. As commitment power disappears, there is a clear “deadline effect.” That is, trade takes place smoothly before the deadline and with an atom right at the deadline. Prices, timing of trade, and the deadline effect respond to the consequences of not reaching an agreement. Bleaker disagreement options lead to more trade and proportionally more of the agreements taking place on the verge of the deadline. Time to deadline can affect the overall efficiency of the equilibrium nonmonotonically. For intermediate deadlines, efficiency is improved if agents face bleaker prospects after deadline. (JEL C78, D82)

Publisher

American Economic Association

Subject

General Economics, Econometrics and Finance

Link

https://pubs.aeaweb.org/doi/pdf/10.1257/mic.5.4.219

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