Bargaining and News

• 成果类型: Article
• 署名作者: Daley, Brendan; Green, Brett
• 署名单位: Johns Hopkins University; Johns Hopkins Medicine; Washington University (WUSTL)
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20181316
• 发表日期: 2020
• 页码: 428-474
• 关键词: DURABLE GOODS MONOPOLY; MARKET; acquisitions; games

摘要

We study a bargaining model in which a buyer makes frequent offers to a privately informed seller, while gradually learning about the seller's type from news. We show that the buyer's ability to leverage this information to extract more surplus from the seller is remarkably limited. In fact, the buyer gains nothing from the ability to negotiate a better price despite the fact that a negotiation must take place in equilibrium. During the negotiation, the buyer engages in a form of costly experimentation by making offers that are sure to earn her negative payoffs if accepted, but speed up learning and improve her continuation payoff if rejected. We investigate the effects of market power by comparing our results to a setting with competitive buyers. Both efficiency and the seller's payoff can decrease by introducing competition among buyers. (JEL C78, D82, D83)