Dynamic Outside Options and Optimal Negotiation Strategies

• 成果类型: Article
• 署名作者: McClellan, Andrew
• 署名单位: University of Chicago
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20230015
• 发表日期: 2024
• 页码: 3284-3313
• 关键词: TERMINATION

摘要

We study the design of negotiation strategies when a principal and agent must decide how to split a pie while the agent's outside option changes over time. The principal's optimal strategy under commitment demonstrates a new, , but intuitive, , set of negotiation dynamics. When the agent is tempted to leave, , the principal gradually promises a larger share ( decreasing demands) ) and more time to explore the outside option ( decreasing pressure), ) , illustrating a complementarity between these two tools. Although the principal's expected utility is decreasing in the outside option, , his expected utility and demands are increasing in the outside option's drift and volatility.