Equilibrium Partner Switching in a Bargaining Model with Asymmetric Information
نویسندگان
چکیده
We study a model in which the seller of an indivisible object faces two potential buyers and makes an offer to either of them in each period. We find that the seller’s ability to extract surplus from them depends crucially on the value of the cost of switching from one buyer to the next. If the seller is pessimistic about the buyers’ valuations and there is a switching cost, however small, then the market is a natural bilateral monopoly; the second buyer is never called on. If the switching cost is zero, or if the seller is optimistic, then switching, and possibly recall of the original buyer, may occur.
منابع مشابه
Employing a Multi-Criteria Approach under Bankruptcy Conditions for Optimal Allocation of Shared Water Resources through Using Asymmetric Nash Bargaining Method
Management based on the flexibility, fairness, and sustainability characteristics of water resources may play a key role in preventing the continuation of the crisis process as well as reducing water users’ conflict. In the present research, the framework for the optimal allocation of shared water resources was presented using a combination of bankruptcy concepts and asymmetric Nash bargaining....
متن کاملThe Effect of Asymmetric Information in the Money Market on Investment, Employment, and Production in Iran
Nowadays, banks are considered as one of the major components of the financial system of a country and any deficits and malfunction in the banking system will negatively affect the performance of the real sector. Therefore, there is a need for more investigation on the behavior of banks and factors affecting those behaviors in a country. One of the issues that affect the behavior of banks is sy...
متن کاملIntra-Firm Bargaining, Asymmetric Learning and Wage Dynamics
This paper develops a bargaining model between employers and workers that is driven by asymmetric information between current employers and potential employers. The current employer and the worker have the same information regarding the worker’s productivity. This information is not available to outside firms, which observe only wages. I develop a wage signaling model in which workers and emplo...
متن کاملBargaining, 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...
متن کاملBounded Rationality in Laboratory Bargaining with Asymmetric Information
This paper reports an experiment on two-player sequential bargaining with asymmetric information. The experimental design is simple enough to permit computation of predictions of models of bounded rationality, yet rich enough to capture the forces at work in multi-round monopoly pricing environments. Buyer-seller pairs play a series of bargaining games that last for either one or two rounds of ...
متن کامل