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Signaling bargaining power: Strategic delay versus restricted offers

Author

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  • Mehmet Bac

    (Department of Economics, Bilkent University, Bilkent, Ankara 06533, TURKEY)

Abstract

I study the first-round separating equilibrium of a buyer-seller bargaining game, extended to allow for asymmetric information, strategically delayed offers and offers restricted to a portion of the good. When bargaining is over a consumption good, in equilibrium the "strong" buyer uses a restricted offer if his optimal consumption path is conservative relative to the "weak" buyer. A pure restricted offer may even be a costless, efficient signal. When the good is durable, a pure strategic delay is involved in signaling a strong bargaining position if the discount factor is high.

Suggested Citation

  • Mehmet Bac, 2000. "Signaling bargaining power: Strategic delay versus restricted offers," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 16(1), pages 227-237.
  • Handle: RePEc:spr:joecth:v:16:y:2000:i:1:p:227-237
    Note: Received: June 24, 1998; revised version: May 30, 1999
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    Citations

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    Cited by:

    1. SangMok Lee, 2014. "Plea bargaining: on the selection of jury trials," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 57(1), pages 59-88, September.
    2. Karagözoğlu, Emin & Keskin, Kerim, 2018. "Time-varying fairness concerns, delay, and disagreement in bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 147(C), pages 115-128.
    3. Mehmet Bac, 2001. "On Creating and Claiming Value in Negotiations," Group Decision and Negotiation, Springer, vol. 10(3), pages 237-251, May.

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