The Role of External Search in Bilateral Bargaining

Shirish D. Chikte and Sudhakar D. Deshmukh
Additional contact information
Shirish D. Chikte: Bell Communications Research, Red Bank, New Jersey
Sudhakar D. Deshmukh: Northwestern University, Evanston, Illinois

Operations Research, 1987, vol. 35, issue 2, 198-205

Abstract: We consider the problem of bargaining between two individuals who can also search for possible alternatives to each other's offers. We explicitly incorporate the search activity into the process of bargaining: a disagreement in bargaining will lead each individual to search for an outside offer in the hope of improving his future bargaining position and attaining a more favorable outcome. We model the interlaced phases of bargaining and search over time as an extensive noncooperative game. We characterize the associated subgame-perfect equilibrium outcome and strategies. Finally, we show that superior search ability yields an individual a more favorable outcome and hence represents a greater bargaining strength.

Keywords: 232 two-person bargaining with search for outside alternatives; 751 search ability represents bargaining strength (search for similar items in EconPapers)
Date: 1987
References: Add references at CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://dx.doi.org/10.1287/opre.35.2.198 (application/pdf)

Related works:
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:inm:oropre:v:35:y:1987:i:2:p:198-205

Access Statistics for this article

More articles in Operations Research from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().