Text

Gathering Information Before Negotiation

Uncertainty may exist about the desirability of trade in bilateral bargaining. For instance, buyers may not know their value perfectly and sellers may not be fully aware of their cost structure. We endogenize the expected surplus of trade by considering information gathering before price negotiation between a seller and a buyer. We show that prebargaining information acquisition can reverse standard findings in canonical bargaining models, regarding how the bargaining primitives may influence the equilibrium expected payoffs and the negotiated price. In particular, a higher bargaining power can result in a lower expected payoff, because the other party’s reduced incentive to acquire information would reduce the total pie to be split between the parties. In the same vein, the seller’s expected payoff can decrease as its material cost becomes lower or its outside option improves, and the buyer can be hurt by a higher value from the transaction or from its outside option. Similarly, the seller/buyer may become worse off by having more information if that induces the counter party to acquire less information. In addition, the expected negotiated price may decrease with the seller’s relative bargaining power, its material/opportunity cost, or the buyer’s incremental value. We also examine the robustness of the basic results under joint information acquisition or noncredible communication. Moreover, we show that a shopping intermediary may prefer to decrease the seller’s bargaining power or increase the buyer’s cost of gathering information. We discuss how our findings can shed light on practice and empirical research.

Ketersediaan

Informasi Detail

Judul Seri

MANAGEMENT SCIENCE; Vol.69 No.1 January 2023

No. Panggil

-

Penerbit

: .,

Deskripsi Fisik

p. 200-219

Bahasa

English

ISBN/ISSN

-

Klasifikasi

NONE

Tipe Isi

-

Tipe Media

-

Tipe Pembawa

-

Edisi

-

Subjek

PLATFORM MANAGEMENT
INFORMATION ACQUISITION
BARGAINING
PRICE NEGOTIATION

Info Detail Spesifik

https://doi.org/10.1287/mnsc.2022.4360

Pernyataan Tanggungjawab

Liang Guo

Versi lain/terkait

Lampiran Berkas

Komentar