A Note on the Limited Value of Time for Screening
We analyze a bargaining model with one-sided uncertainty where the uninformed party makes all offers. In difference to the literature we allow contracts to include a variable in which the informed party's utility satisfies a standard sorting condition. For instance, a union on strike might offer to a firm with private information about its profitability a sequence of contracts specifying wages and working hours. We solve the model for the two-type case and find that for sufficiently high discount factors delay is not used to screen among types as this would fully erode the screening power of the additional sorting variable. The analysis in this paper also complements the standard principal-agent setting where attention is usually restricted to the case where the (uninformed) principal can commit to a take-it-or-leave-it offer. In contrast, the threat to walk away after rejection is not credible with an infinite time horizon.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||15 Oct 1998|
|Date of revision:|
|Note:||Financial Support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged. I thank seminar participants at the annual conference of the Royal Economic Society 1998 and at EEA'98.|
|Contact details of provider:|| Postal: |
Phone: (49) (0) 621-292-2547
Fax: (49) (0) 621-292-5594
Web page: http://www.sfb504.uni-mannheim.de/
More information through EDIRC
Web page: http://www.sfb504.uni-mannheim.de
|Order Information:|| Email: |
When requesting a correction, please mention this item's handle: RePEc:xrs:sfbmaa:98-33. 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: (Carsten Schmidt)The email address of this maintainer does not seem to be valid anymore. Please ask Carsten Schmidt to update the entry or send us the correct address
If references are entirely missing, you can add them using this form.