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Over-confidence may reduce negotiation delay

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  • Galasso, Alberto

Abstract

When a seller negotiates with multiple buyers, how does over-confidence affect the timing of trade? In this paper we distinguish between over-confidence about trade opportunities and over-confidence about the terms of trade. In bargaining environments without externalities both types of over-confidence can cause delays in agreement. If externalities are present the two forms of subjective bias have very different impacts on delay. In particular, over-confidence about trade opportunities may reduce bargaining delay.

Suggested Citation

  • Galasso, Alberto, 2010. "Over-confidence may reduce negotiation delay," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 716-733, December.
    • Handle: RePEc:eee:jeborg:v:76:y:2010:i:3:p:716-733
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    Cited by:

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    3. David H. Weng & Yasuhiro Yamakawa, 2023. "I believe I can fly: how target venture CEO overconfidence affects acquisition completion," Small Business Economics, Springer, vol. 61(1), pages 127-151, June.

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