Searching for a Bargain: Power of Strategic Commitment

• 成果类型: Article
• 署名作者: Ozyurt, Selcuk
• 署名单位: Sabanci University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20130027
• 发表日期: 2015
• 页码: 320-353
• 关键词: 2-sided incomplete information; perfect equilibrium; MODEL; COMPETITION; reputation; MARKETS; COSTS; DISAGREEMENT; EXISTENCE

摘要

This paper shows that in a multilateral bargaining setting where the sellers compete a la Bertrand, a range of prices that includes the monopoly price and 0 are compatible with equilibrium, even in the limit where the reputational concerns and frictions vanish. In particular, the incentive of committing to a specific demand, the opportunity of building reputation about inflexibility, and the anxiety of preserving their reputation can tilt players' bargaining power in such a way that being deemed as a tough bargainer is bad for the competing players, and thus, price undercutting is not optimal for the sellers.