Bargaining under the Illusion of Transparency
| Autor: | Kristof Madarasz |
|---|---|
| Rok vydání: | 2021 |
| Předmět: |
Economics and Econometrics
Mechanism design Comparative statics Transparency (market) Stochastic game TheoryofComputation_GENERAL jel:C79 jel:D03 Zero (linguistics) Microeconomics Illusion of transparency Coase theorem Economics ComputingMilieux_COMPUTERSANDSOCIETY Bargaining Coase Conjecture Information Projection Pricing Private information retrieval |
| Zdroj: | American Economic Review. 111:3500-3539 |
| ISSN: | 0002-8282 |
| DOI: | 10.1257/aer.20150004 |
| Popis: | This paper studies bargaining with noncommon priors where the buyer projects and exaggerates the probability that her private information may leak to the seller. Letting the buyer name her price first, raises the seller’s payoff above his payoff from posting a price. In seller-offer bargaining, projection implies a partial reversal of classic Coasian comparative static results. Weakening price commitment can benefit the seller and, as long as the relative speed at which imaginary information versus offers arrive does not converge to zero too quickly, frictionless bargaining converges to a fast haggling process which allows the seller to extract all surplus from trade. Bargaining under common prior transparency is instead slow and becomes equivalent to simply waiting. The comparative static predictions are consistent with experimental evidence. (JEL C78, D82) |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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