Publicação
Buying the Option to say "No"
| Resumo: | We analyze a simple model of bilateral bargaining under asymmetric information where the seller of an object can not simply say "no" by default to a buyer who is supposed to make a take-it-or-leave-it offer. Rather, he must acquire this option before the actual bargaining process begins. This choice is observable to the buyer, and hence, the seller's pre-bargaining action might signal private information. We develop a complete characterization of Perfect Bayesian Equilibrium in pure and (strictly) mixed strategies for this game. Then the model is compared to a standard bargaining setting in terms of the realization of welfare enhancing property-right changes. |
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| Autores principais: | Lang, Günther |
| Assunto: | Bargaining Signalling |
| Ano: | 2000 |
| País: | Portugal |
| Tipo de documento: | working paper |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | Universidade Nova de Lisboa |
| Idioma: | inglês |
| Origem: | Repositório Institucional da UNL |
| Resumo: | We analyze a simple model of bilateral bargaining under asymmetric information where the seller of an object can not simply say "no" by default to a buyer who is supposed to make a take-it-or-leave-it offer. Rather, he must acquire this option before the actual bargaining process begins. This choice is observable to the buyer, and hence, the seller's pre-bargaining action might signal private information. We develop a complete characterization of Perfect Bayesian Equilibrium in pure and (strictly) mixed strategies for this game. Then the model is compared to a standard bargaining setting in terms of the realization of welfare enhancing property-right changes. |
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