Commitment and choice of partner in a negotiation with a deadline
ISSN: 1435-5469
Argitalpen urtea: 2002
Alea: 4
Zenbakia: 1
Orrialdeak: 61-78
Mota: Artikulua
Beste argitalpen batzuk: Spanish economic review
Garapen Iraunkorreko Helburuak
Laburpena
This paper analyses the effects of partially revocable endogenous commitments of a seller in a negotiation with a deadline. In particular, we examine when commitment is a source of strength, a source of inefficiency and when it does not affect the bargaining outcome at all. We show that when commitment possesses a minimum amount of irrevocability this crucially determines the bargaining outcome. In the bilateral bargaining case, commitment becomes a source of inefficiency since it causes a deadline effect. In the choice of partner framework, however, the deadline effect disappears and there is an immediate agreement and, moreover, commitment becomes a source of strength since it increases the seller's equilibrium payoff by triggering off competition between the buyers.