Preemption or Wait and See? Endogenous Timing in Bargaining

Found at: https://hdl.handle.net/10535/5767
PDF
Type:	Working Paper
Author:	Güth, Werner; Ritzberger, Klaus
Date:	1999
Agency:
Series:
URI:	https://hdl.handle.net/10535/5767
Sector:	Theory
Region:
Subject(s):	Nash equilibrium bargaining--models risk--theory negotiation--theory
Abstract:	"Suppose two parties have to share a surplus of random size. Each of the two can either commit to a demand prior to the realization of the surplus, or wait until the surplus was publicly observed. Early commitments carry the risk that negotiations break down, because the surplus turns out too small. Still, when uncertainty is sufficiently small, commitment is a dominant choice. For more diffuse priors the equilibrium outcome depends on the distribution function and on risk aversion."

Files in this item

Files	Size	Format	View
Preemption or wait and see.pdf	580.2Kb	PDF	View/Open