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Informational Disadvantage and Bargaining Power

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  • Sung-Hyuk Ko

    (ETRI)

  • Byoung Heon Jun

    () (Department of Economics, Korea University)

Abstract

We consider an alternating offer model where the size of the total surplus is stochastic. Furthermore, the size changes during the time when the offer is being considered. As a result the responder may obtain more information than the proposer. We analyze how the asymmetry in ability to access good information affects the bargaining power, both in terms of the resulting share and in terms of the delay in agreement.

Suggested Citation

  • Sung-Hyuk Ko & Byoung Heon Jun, 2007. "Informational Disadvantage and Bargaining Power," Discussion Paper Series 0711, Institute of Economic Research, Korea University.
  • Handle: RePEc:iek:wpaper:0711
    as

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    File URL: http://econ.korea.ac.kr/~ri/WorkingPapers/w0711.pdf
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    References listed on IDEAS

    as
    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. Avery Christopher & Zemsky Peter B., 1994. "Option Values and Bargaining Delays," Games and Economic Behavior, Elsevier, vol. 7(2), pages 139-153, September.
    3. Ben-Ner, Avner & Jun, Byoung, 1996. "Employee Buyout in a Bargaining Game with Asymmetric Information," American Economic Review, American Economic Association, vol. 86(3), pages 502-523, June.
    4. Merlo, Antonio & Wilson, Charles A, 1995. "A Stochastic Model of Sequential Bargaining with Complete Information," Econometrica, Econometric Society, vol. 63(2), pages 371-399, March.
    5. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
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    Keywords

    alternating offer bargaining; stochastic surplus; informational disadvantage;

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