IDEAS home Printed from https://ideas.repec.org/a/oup/restud/v81y2014i1p1-29.html
   My bibliography  Save this article

Bargaining and Reputation in Search Markets

Author

Listed:
  • Alp E. Atakan
  • Mehmet Ekmekci

Abstract

This article considers a two-sided search market where firms and workers are paired to bargain over a unit surplus. The matching market serves as an endogenous outside option for the agents. The market includes inflexible commitment types who demand a constant portion of any match surplus. The frequency of such types is determined in equilibrium.An equilibrium where there are significant delays in reaching an agreement and where negotiations occasionally break down on the equilibrium path is constructed. Such an equilibrium exists and commitment types affect bargaining dynamics even if the equilibrium frequency of such types is negligible. If the inflows of firms and workers into the market are symmetric, then bargaining involves two-sided reputation building and reputation concerns lead to delays and inefficiency. Access to the market exacerbates bargaining inefficiencies caused by inflexible types. If the inflows of workers and firms are sufficiently asymmetric, then bargaining involves one-sided reputation and commitment types determine the terms of trade. Copyright 2014, Oxford University Press.

Suggested Citation

  • Alp E. Atakan & Mehmet Ekmekci, 2014. "Bargaining and Reputation in Search Markets," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(1), pages 1-29.
    • Handle: RePEc:oup:restud:v:81:y:2014:i:1:p:1-29
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/restud/rdt021
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Selçuk Özyurt, 2015. "Searching for a Bargain: Power of Strategic Commitment," American Economic Journal: Microeconomics, American Economic Association, vol. 7(1), pages 320-353, February.
    2. Send, Jonas & Serena, Marco, 2022. "An empirical analysis of insistent bargaining," Journal of Economic Psychology, Elsevier, vol. 90(C).
    3. Kimbrough, Erik O. & Laughren, Kevin & Sheremeta, Roman, 2020. "War and conflict in economics: Theories, applications, and recent trends," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 998-1013.
    4. Anton Tsoy, 2016. "Liquidity and Prices in Decentralized Markets with Almost Public Information," 2016 Meeting Papers 8, Society for Economic Dynamics.
    5. Hanzhe Zhang, 2021. "Prices versus auctions in large markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(4), pages 1297-1337, November.
    6. Mehmet Ekmekci & Hanzhe Zhang, 2021. "Reputational Bargaining with Ultimatum Opportunities," Papers 2105.01581, arXiv.org.
    7. Sanktjohanser, Anna, 2022. "Optimally Stubborn," TSE Working Papers 22-1367, Toulouse School of Economics (TSE).
    8. Jonas Send & Marco Serena, 2021. "An Empirical Analysis of Stubborn Bargaining," Working Papers tax-mpg-rps-2021-05, Max Planck Institute for Tax Law and Public Finance.
    9. Chatterjee, Kalyan & Das, Kaustav, 2017. "Bilateral trading and incomplete information: Price convergence in a small market," Games and Economic Behavior, Elsevier, vol. 106(C), pages 89-113.
    10. Yusuke Mori, 2013. "A Formal Theory of Firm Boundaries: A Trade-Off between Rent Seeking and Bargaining Costs," Discussion Paper Series DP2013-20, Research Institute for Economics & Business Administration, Kobe University.
    11. Schweighofer-Kodritsch, Sebastian, 2022. "The bargaining trap," Games and Economic Behavior, Elsevier, vol. 136(C), pages 249-254.
    12. Thành Nguyen & Vijay Subramanian & Randall Berry, 2016. "Delay in Trade Networks," Operations Research, INFORMS, vol. 64(3), pages 646-661, June.
    13. Anna Sanktjohanser, 2020. "Optimally Stubborn," Cowles Foundation Discussion Papers 2255, Cowles Foundation for Research in Economics, Yale University.
    14. Özyurt Selçuk, 2016. "Building Reputation in a War of Attrition Game: Hawkish or Dovish Stance?," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 16(2), pages 797-816, June.
    15. Kesten, Onur & Kurino, Morimitsu, 2019. "Strategy-proof improvements upon deferred acceptance: A maximal domain for possibility," Games and Economic Behavior, Elsevier, vol. 117(C), pages 120-143.
    16. Bernardita Vial & Felipe Zurita, 2017. "Entrants' Reputation And Industry Dynamics," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58(2), pages 529-559, May.

    More about this item

    JEL classification:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:restud:v:81:y:2014:i:1:p:1-29. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/restud .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.