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Optimal deadlines for agreements

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  • ,

    (Department of Economics, University of Toronto)

  • ,

    (Department of Economics, University of British Columbia)

  • ,

    (School of Economics and Finance, The University of Hong Kong)

Abstract

Costly delay in negotiations can induce the negotiating parties to be more forthcoming with their information and improve the quality of the collective decision. Imposing a deadline may result in stalling, in which players at some point stop making concessions but switch back to conceding at the end, or a deadlock, in which concessions end permanently. Extending the deadline hurts the players in the first case but is beneficial in the second. When the initial conflict between the negotiating parties is intermediate, the optimal deadline is positive and finite, and is characterized by the shortest time that would allow efficient information aggregation in equilibrium.

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  • , & , & ,, 2012. "Optimal deadlines for agreements," Theoretical Economics, Econometric Society, vol. 7(2), May.
    • Handle: RePEc:the:publsh:847
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    References listed on IDEAS

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    Cited by:

    1. Xu, Haibo, 2021. "A model of gradual information disclosure," Games and Economic Behavior, Elsevier, vol. 129(C), pages 238-269.
    2. Han Feng & David Hobson, 2015. "Gambling in contests modelled with diffusions," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 38(1), pages 21-37, April.
    3. Christian Seel, 2018. "Contests with endogenous deadlines," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 27(1), pages 119-133, March.
    4. Spinnewijn, Johannes & Campbell, Arthur & Ederer, Florian, 2011. "Time to Decide: Information Search and Revelation in Groups," CEPR Discussion Papers 8531, C.E.P.R. Discussion Papers.
    5. Avni, Shlomit & Filc, Dani & Davidovitch, Nadav, 2015. "The Israeli Medical Association's discourse on health inequity," Social Science & Medicine, Elsevier, vol. 144(C), pages 119-126.
    6. Damiano, Ettore & Li, Hao & Suen, Wing, 2021. "Optimal delay in committees," Games and Economic Behavior, Elsevier, vol. 129(C), pages 449-475.
    7. Emin Karagözoğlu & Martin G. Kocher, 2019. "Bargaining under time pressure from deadlines," Experimental Economics, Springer;Economic Science Association, vol. 22(2), pages 419-440, June.
    8. Weng, Xi, 2015. "Can learning cause shorter delays in reaching agreements?," Journal of Mathematical Economics, Elsevier, vol. 60(C), pages 49-62.
    9. Katsoulacos, Yannis & Ulph, David, 2017. "Regulatory decision errors, Legal Uncertainty and welfare: A general treatment," International Journal of Industrial Organization, Elsevier, vol. 53(C), pages 326-352.
    10. Wei Zhang & Jingqi Wang & Reza Ahmadi & Sriram Dasu, 2021. "Timing the Price Agreement in High‐Tech Component Procurement," Production and Operations Management, Production and Operations Management Society, vol. 30(11), pages 4105-4120, November.
    11. Frommeyer, Tim, 2015. "On Two-Period Committee Voting: Why Straw Polls Should Have Consequences," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112806, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    Repeated proposals; war of attrition; interdependent values;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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