Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/71955
Authors: 
Gantner, Anita
Year of Publication: 
2007
Series/Report no.: 
Working Papers in Economics and Statistics 2007-16
Abstract: 
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 with complete information, the option to return to bargaining is not redundant in equilibrium. However, the no-delay result still holds. In Regime II, where agents have asymmetric information about the outside option, delay is possible. The solution characterizes the parameters for renegotiation and those for search with no return to the bargaining table.
Subjects: 
bargaining
two-sided incomplete information
outside option
search
JEL: 
C78
D83
C61
Document Type: 
Working Paper

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