The Library
Optimal stalling when bargaining
Tools
Thanassoulis, John (2010) Optimal stalling when bargaining. Journal of Economic Dynamics and Control, Volume 34 (Number 2). pp. 101-120. doi:10.1016/j.jedc.2009.05.003 ISSN 0165-1889.
Research output not available from this repository.
Request-a-Copy directly from author or use local Library Get it For Me service.
Official URL: http://dx.doi.org/10.1016/j.jedc.2009.05.003
Abstract
This paper analyzes an alternating offer model of bargaining over the sale of an asset in a market, such as that for housing, in which another agent may come and compete for the right to strike a deal. The analysis allows the buyer and seller to have possibly differing views as to how likely such a competition is. Hence the buyer and the seller disagree about their respective bargaining powers. These views adjust to market realizations as the parties learn. It is shown that there exists a unique subgame perfect equilibrium which can be explicitly constructed: hence, conditional on market conditions, equilibrium prices and optimal stall lengths (that is, delay) can be found. Bargaining delay can only occur if there is optimism (not pessimism) and only if the parties are open to learning as time elapses. This delay can occur even for very small levels of optimism and the delay can be for economically significant periods.
Item Type: | Journal Article | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Subjects: | H Social Sciences > HB Economic Theory | ||||||||||
Divisions: | Faculty of Social Sciences > Warwick Business School > Finance Group Faculty of Social Sciences > Warwick Business School |
||||||||||
Library of Congress Subject Headings (LCSH): | House buying, House selling | ||||||||||
Journal or Publication Title: | Journal of Economic Dynamics and Control | ||||||||||
Publisher: | Elsevier BV | ||||||||||
ISSN: | 0165-1889 | ||||||||||
Official Date: | February 2010 | ||||||||||
Dates: |
|
||||||||||
Volume: | Volume 34 | ||||||||||
Number: | Number 2 | ||||||||||
Number of Pages: | 19 | ||||||||||
Page Range: | pp. 101-120 | ||||||||||
DOI: | 10.1016/j.jedc.2009.05.003 | ||||||||||
Status: | Peer Reviewed | ||||||||||
Publication Status: | Published | ||||||||||
Access rights to Published version: | Restricted or Subscription Access |
Request changes or add full text files to a record
Repository staff actions (login required)
View Item |