Bargaining over Contingent Contracts under Incomplete Information

Bargaining under Incomplete Information

Bargaining over Incentive Contracts

Standard contract theory assumes that the principal holds all of the bargaining power. By implementing alternating o¤er and strategic delay, we transform the one-shot contracts design game into the in…nite-horizon contracts bargaining game. The uninformed principal and the informed agent bargain over multiple dimensions. Our paper presents the following new results. When the di¤erence between t...

Foreign market entry under incomplete contracts

I show in this paper that incomplete contracts affect a firm’s decision about serving foreign customers through exports or local sales from an affiliated plant. When contracts between two agents within a firm are too costly to write, the share of multinational firms may be higher or lower compared to a world without contractual frictions. Incomplete contracts also provide a novel explanation fo...

On Majoritarian Bargaining with Incomplete Information

December 2008 [Abstract] This paper studies a finite horizon version of Baron and Ferejohn’s (1989) majoritarian bargaining with incomplete information. Our devised model essentially blends Spence’s signaling and the coalition formation of majoritarian bargaining. The main findings include: (i) oversized coalitions may arise in equilibrium and allowing for delay can be optimal for a proposer; (...

Bargaining and Conflict with Incomplete Information

This paper studies bargaining and conflict under incomplete information, provides an overview and a critical account of the literature on the topic and contributes with original research. We first revise models of mechanism design and sequential bargaining that take confrontation as final. Conflict and inefficiencies are to be expected in these models whenever parties have optimistic prospects ...