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Alternating-offer bargaining over menus under incomplete information

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  • Roman Inderst

Abstract

This paper considers bargaining with one-sided private information and alternating offers where an agreement specifies both a transfer and an additional (sorting) variable. Moreover, both sides can propose menus. We show that for a subset of parameters the alternating-offer game has a unique equilibrium where efficient contracts are implemented in the first period. This stands in sharp contrast to the benchmarks of contract theory, where typically only the uninformed side proposes, and bargaining theory, where typically the agreement only specifies a transfer. Copyright Springer-Verlag Berlin Heidelberg 2003

Suggested Citation

  • Roman Inderst, 2003. "Alternating-offer bargaining over menus under incomplete information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 22(2), pages 419-429, September.
  • Handle: RePEc:spr:joecth:v:22:y:2003:i:2:p:419-429
    DOI: 10.1007/s00199-002-0290-y
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    Citations

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    Cited by:

    1. Cordero Salas, Paula, 2016. "Relational Contracts and Product Quality: The Effect of Bargaining Power on Efficiency and Distribution," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(3), pages 1-19.
    2. SangMok Lee, 2014. "Plea bargaining: on the selection of jury trials," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 57(1), pages 59-88, September.
    3. Arijit Sen, 2017. "Symmetry in Bargaining and Efficient Contracts under Asymmetric Information," Studies in Microeconomics, , vol. 5(2), pages 132-142, December.
    4. Yao, Zhiyong, 2012. "Bargaining over incentive contracts," Journal of Mathematical Economics, Elsevier, vol. 48(2), pages 98-106.
    5. Palermo, Alberto, 2016. "Hold-up in vertical hierarchies with adverse selection," Economics Letters, Elsevier, vol. 148(C), pages 91-95.
    6. Qi Feng & Guoming Lai & Lauren Xiaoyuan Lu, 2015. "Dynamic Bargaining in a Supply Chain with Asymmetric Demand Information," Management Science, INFORMS, vol. 61(2), pages 301-315, February.

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