The negotiators who knew too much: Transaction costs and incomplete information

Patrick Schmitz

Economics Letters, 2016, vol. 145, issue C, 33-37

Abstract: Two parties can at some future date 2 negotiate about whether or not to collaborate in order to generate a surplus. Yet, the negotiation stage will be reached only if at date 1 both parties pay their respective transaction costs. We show that the expected total surplus may be larger when at date 1 the parties do not yet know the size of the surplus that can be generated at date 2. Moreover, joint ownership can be optimal under incomplete information even when it would be suboptimal under complete information.

Keywords: Transaction costs; Property rights; Bargaining; Incomplete information; Joint ownership (search for similar items in EconPapers)
JEL-codes: C78 D23 D86 L14 L24 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176516301653
Full text for ScienceDirect subscribers only

Related works:
Working Paper: The Negotiators Who Knew Too Much: Transaction Costs and Incomplete Information (2016)
Working Paper: The Negotiators Who Knew Too Much: Transaction Costs and Incomplete Information (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:145:y:2016:i:c:p:33-37

DOI: 10.1016/j.econlet.2016.05.009

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().