Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/150252
Authors: 
Kaya, Ayça
Liu, Qingmin
Year of Publication: 
2015
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 10 [Year:] 2015 [Issue:] 2 [Pages:] 341-383
Abstract: 
We study the role that price transparency plays in determining the efficiency and surplus division in a sequential bargaining model of price formation with asymmetric information. Under natural assumptions on type distributions, and for any discount factor, we show that the unobservability of past negotiations leads to lower prices and faster trading. Unobservability therefore enhances the ``Coasian effect" by fostering efficiency and diverting more of the surplus to the player who possesses private information. In addition, we show that the equilibrium is unique and is in pure strategies in the non-transparent regime; this stands in sharp contrast to the existing literature and allows for a better understanding of the Coasian effect and price observability.
Subjects: 
Coase conjecture
bargaining
durable goods monopoly
incomplete information
price formation
transparency
JEL: 
C61
C73
C78
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0/
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.