Over-confidence may reduce negotiation delay

Alberto Galasso

Journal of Economic Behavior & Organization, 2010, vol. 76, issue 3, 716-733

Abstract: Abstract When a seller negotiates with multiple buyers, how does over-confidence affect the timing of trade? In this paper we distinguish between over-confidence about trade opportunities and over-confidence about the terms of trade. In bargaining environments without externalities both types of over-confidence can cause delays in agreement. If externalities are present the two forms of subjective bias have very different impacts on delay. In particular, over-confidence about trade opportunities may reduce bargaining delay.

Keywords: Bargaining; Over-confidence; Externalities (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:76:y:2010:i:3:p:716-733

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