Career Concerns of Bargainers
This article studies strategic bargaining in which a seller and a buyer are each represented by an agent. Potential agents differ in their ability to obtain information about the other party's reservation price; neither principal knows the other's reservation price or her agent's type. Agents are motivated by career concerns; they want to be perceived as skilled bargainers by their principals. In equilibrium, skilled agents use their private information optimally, while unskilled agents randomize between aggressive and soft price bids, attempting to imitate skilled types. We compare "open-door" bargaining, in which principals can observe the entire bargaining game as well as its outcome, with "closed-door" bargaining, in which they observe only the outcome. We show that agents unambiguously bargain more aggressively with open doors than behind closed doors, which leads to a less efficient bargaining outcome. Their principals may therefore prefer to let their agents bargain behind closed doors. Copyright 2005, Oxford University Press.
Volume (Year): 21 (2005)
Issue (Month): 1 (April)
|Contact details of provider:|| Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK|
Fax: 01865 267 985
Web page: http://jleo.oupjournals.org/
|Order Information:||Web: http://www.oup.co.uk/journals|
When requesting a correction, please mention this item's handle: RePEc:oup:jleorg:v:21:y:2005:i:1:p:179-204. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.