Search, Bargaining, and Employer Discrimination

Posted Prices, Search and Bargaining

A model of a decentralized market is developed that features search frictions, advertised prices and bargaining. Sellers can post ask prices to attract buyers through a process of directed search, but ex post there is the possibility of negotiation. Similarly, buyers can post negotiable bid prices to attract sellers. Even when transaction prices often differ from quoted prices, bid and ask pric...

Bargaining, search, and outside options

This paper studies a two-sided incomplete information bargaining model between a seller and a buyer. The buyer has an outside option, which is modeled as a sequential search process during which he can also choose to return to bargaining at any time. Two cases considered: In Regime I, both agents have symmetric information about the search parameters. We find that, in contrast to bargaining wit...

Inefficient pre-bargaining search

The MIT Faculty has made this article openly available. Please share how this access benefits you. Your story matters. Abstract We identify conditions under which a bargainer makes inefficiently large (small) investments in search for information about the opponent's reservation price. The analysis starts with the observation that a player will invest too much (too little) if the opponent's exp...

Bayesian Bigot? Statistical Discrimination, Stereotypes, and Employer Decision Making.

Much of the debate over the underlying causes of discrimination centers on the rationality of employer decision making. Economic models of statistical discrimination emphasize the cognitive utility of group estimates as a means of dealing with the problems of uncertainty. Sociological and social-psychological models, by contrast, question the accuracy of group-level attributions. Although mean ...

INEFFICIENT PRE-BARGAINING SEARCH By