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Threats and promises in bargaining


  • Chung, Bobby W.
  • Wood, Daniel H.


If, prior to bargaining, bargainers can make commitments that have some chance of binding their bargaining behavior, they may want to threaten to reject low offers, promise to accept high offers, or both. We show that the timing of commitment attempts influences the goal of the commitments and the likelihood that incompatible threats result in impasse. Sequential commitments enable the player who commits first to make a moderate threat that convinces the second mover not to respond with a threat himself. The moderate threat requires a promise to not renege on the offer if the committed player would otherwise have incentives to deviate. This combination of tactics is not feasible when commitments are made simultaneously.

Suggested Citation

  • Chung, Bobby W. & Wood, Daniel H., 2019. "Threats and promises in bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 165(C), pages 37-50.
  • Handle: RePEc:eee:jeborg:v:165:y:2019:i:c:p:37-50
    DOI: 10.1016/j.jebo.2019.07.002

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    More about this item


    Bargaining; Commitment; Promises; Threats; Endogenous timing;

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory


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