Optimal deadlines for agreements
, (ettore.damiano@utoronto.ca),
, (lidothao@interchange.ubc.ca) and
, (wsuen@econ.hku.hk)
Additional contact information
,: Department of Economics, University of Toronto
,: Department of Economics, University of British Columbia
,: School of Economics and Finance, The University of Hong Kong
Authors registered in the RePEc Author Service: Ettore Damiano (ettore.damiano@utoronto.ca),
Hao Li and
Wing Suen
Theoretical Economics, 2012, vol. 7, issue 2
Abstract:
Costly delay in negotiations can induce the negotiating parties to be more forthcoming with their information and improve the quality of the collective decision. Imposing a deadline may result in stalling, in which players at some point stop making concessions but switch back to conceding at the end, or a deadlock, in which concessions end permanently. Extending the deadline hurts the players in the first case but is beneficial in the second. When the initial conflict between the negotiating parties is intermediate, the optimal deadline is positive and finite, and is characterized by the shortest time that would allow efficient information aggregation in equilibrium.
Keywords: Repeated proposals; war of attrition; interdependent values (search for similar items in EconPapers)
JEL-codes: C72 C78 D74 D82 D83 (search for similar items in EconPapers)
Date: 2012-05-18
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Citations: View citations in EconPapers (10)
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Working Paper: Optimal deadlines for agreements (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:the:publsh:847
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