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Strategic disclosure of feasible options

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  • de Clippel, Geoffroy
  • Eliaz, Kfir

Abstract

The paper illustrates how people who need to make a joint decision may have an incentive to withhold information regarding the existence of Pareto improving options. The resulting level of inefficiency varies with the way compromises are reached when the parties have to choose among multiple options. Various reasonable compromise rules can be ranked unequivocally, and a rule resulting in a minimal level of inefficiency is identified. Qualitative results extend to sequential disclosure. Enforcing a hard deadline for disclosure may be welfare improving in some circumstances.

Suggested Citation

  • de Clippel, Geoffroy & Eliaz, Kfir, 2015. "Strategic disclosure of feasible options," Games and Economic Behavior, Elsevier, vol. 91(C), pages 145-165.
    • Handle: RePEc:eee:gamebe:v:91:y:2015:i:c:p:145-165
    DOI: 10.1016/j.geb.2015.02.016
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    References listed on IDEAS

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    Cited by:

    1. Yuan Ju, 2013. "Efficiency and compromise: a bid-offer–counteroffer mechanism with two players," International Journal of Game Theory, Springer;Game Theory Society, vol. 42(2), pages 501-520, May.

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    More about this item

    Keywords

    Bargaining; Disclosure;

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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