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Signaling via an agenda in multi-issue bargaining with incomplete information

  • Lutz-Alexander Busch

    (Department of Economics, University of Waterloo, Waterloo, Ontario N2L 3G1, CANADA)

  • Ignatius J. Horstmann

    (Department of Economics, University of Western Ontario, London, Ontario N6A 5C2, CANADA)

While actual bargaining features many issues and decision making on the order in which issues are negotiated and resolved, the typical models of bargaining do not. Instead, they have either a single issue or many issues resolved in some fixed order, typically simultaneously. This paper shows that, when there is incomplete information, such an approach removes an important avenue for information transmission: the bargaining agenda itself. Compared to the standard model, pooling on offers by the informed is reduced and a signaling equilibrium arises when the agenda is determined endogenously. Signaling is carried out by use of an issue-by-issue bargaining agenda.

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Article provided by Springer in its journal Economic Theory.

Volume (Year): 13 (1999)
Issue (Month): 3 ()
Pages: 561-575

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Handle: RePEc:spr:joecth:v:13:y:1999:i:3:p:561-575
Note: Received: September 3, 1997; revised version: May 11, 1998
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