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On the role of confidentiality and deadlines in bilateral negotiations

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  • Krasteva, Silvana
  • Yildirim, Huseyin
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    Abstract

    The preference between public and private negotiations for a buyer who sequentially visits two sellers is examined. It is shown that the buyer (weakly) prefers private negotiations so as to create strategic uncertainty about the trade history. With substitute goods, such uncertainty is valuable only when price offers have short deadlines that prevent a head-to-head competition. With complementary goods, strategic uncertainty is valuable to the extent that price coordination becomes a concern for sellers, which is likely to be the case when sellers possess high bargaining powers; their price offers have short deadlines; and/or goods are weak complements. Sellersʼ strategic deadline choices as well as their incentives to disclose information about negotiations are also investigated.

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    Bibliographic Info

    Article provided by Elsevier in its journal Games and Economic Behavior.

    Volume (Year): 75 (2012)
    Issue (Month): 2 ()
    Pages: 714-730

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    Handle: RePEc:eee:gamebe:v:75:y:2012:i:2:p:714-730

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    Web page: http://www.elsevier.com/locate/inca/622836

    Related research

    Keywords: Public negotiations; Private negotiations; Exploding offers; Open-ended offers; Bargaining power;

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    References

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