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The Impact of Managerial Flexibility on Negotiation Strategy and Bargaining Power

Author

Listed:
  • Elmar Lukas

    (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)

  • Andreas Welling

    (Economics Institute, Brandenburg University of Technology, Cottbus)

Abstract

Using a dynamic real options approach we show that in a sequential bargaining framework managerial flexibility is strengthening the first-mover advantage by undermining the bargaining power of the second mover. Furthermore we compare the results of the sequential framework with the results of cooperative bargaining.

Suggested Citation

  • Elmar Lukas & Andreas Welling, 2011. "The Impact of Managerial Flexibility on Negotiation Strategy and Bargaining Power," FEMM Working Papers 110008, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    • Handle: RePEc:mag:wpaper:110008
    as

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    References listed on IDEAS

    as
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    3. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    4. Gupta, Madhurima & Lebrun, Bernard, 1999. "First price auctions with resale," Economics Letters, Elsevier, vol. 64(2), pages 181-185, August.
    5. Sutter, Matthias & Kocher, Martin & Strau[ss], Sabine, 2003. "Bargaining under time pressure in an experimental ultimatum game," Economics Letters, Elsevier, vol. 81(3), pages 341-347, December.
    6. Anat R. Admati & Motty Perry, 1987. "Strategic Delay in Bargaining," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(3), pages 345-364.
    7. Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 367-388, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    real option; game theory; sale; negotiation; flexibility; ultimatum game;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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