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Bargaining with evolving private information

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  • Ortner, Juan

    (Department of Economics, Boston University)

Abstract

I study how the arrival of new private information affects bargaining outcomes. A seller makes offers to a buyer. The buyer is privately informed about her valuation, and the seller privately observes her stochastically changing cost of delivering the good. Prices fall gradually at the early stages of negotiations, and trade is inefficiently delayed. The first-best is implementable via a mechanism, whereas all equilibrium outcomes of the bargaining game are inefficient.

Suggested Citation

  • Ortner, Juan, 2023. "Bargaining with evolving private information," Theoretical Economics, Econometric Society, vol. 18(3), July.
    • Handle: RePEc:the:publsh:4841
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    References listed on IDEAS

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    More about this item

    Keywords

    Bargaining; inefficient delay; Coase conjecture; evolving private information; two-sided private information;
    All these keywords.

    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
    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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