Abstract
This paper considers a model of bargaining in which the seller makes offers and the buyer can search (at a cost) for an outside option; the outside option cannot be credibly communicated, and the seller's offer is recallable by the buyer for one period. There are essentially two equilibrium regimes. For sufficiently high search cost, the game ends immediately; otherwise the search occurs in equilibrium. Compared to the case where the buyer can communicate his outside option, the seller is worse off, and the game results in search for a smaller set of values of the search cost, i.e., less equilibrium delay. Journal of Economic Literature Classification Number: C72.
Original language | English (US) |
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Title of host publication | Bargaining in the Shadow of the Market |
Subtitle of host publication | Selected Papers on Bilateral and Multilateral Bargaining |
Publisher | World Scientific Publishing Co. |
Pages | 15-50 |
Number of pages | 36 |
ISBN (Electronic) | 9789814447577 |
ISBN (Print) | 9814447560, 9789814447560 |
DOIs | |
State | Published - Jan 1 2013 |
All Science Journal Classification (ASJC) codes
- Business, Management and Accounting(all)
- Economics, Econometrics and Finance(all)
- Mathematics(all)