Negative externalities may cause delay in negotiation

P. Jehiel*, B. Moldovanu

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

We study the strategic equilibria of a negotiation game where potential buyers are affected by identity-dependent, negative externalities. The unique equilibrium of long, finitely repeated generic games can either display delay-where a transaction can take place only in several stages before the deadline-or, in spite of the random element in the game, a well-defined buyer exists that obtains the object with probability close to one.

Original languageEnglish
Pages (from-to)1321-1335
Number of pages15
JournalEconometrica
Volume63
Issue number6
DOIs
StatePublished - 1995
Externally publishedYes

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