Bargaining with Uncertain Value Distributions

Huan Xie

No 8005, Working Papers from Concordia University, Department of Economics

Abstract: This paper studies a bargaining model in which the seller is uncertain about which distribution the buyer's values are drawn from. The distribution of the buyer's values is fixed across periods, while the buyer’s values are drawn independently from the distribution each period. In the classical model of repeated bargaining where the buyer’s value is drawn from a commonly known distribution and fixed across periods, the high-value buyer has a strong incentive to conceal his value, and the seller loses most of her bargaining power. An important question is whether adding a layer of uncertainty makes the high-value buyer more willing to accept high-price offers and improves the seller’s revenue. We find this to be the case as long as the seller’s ex ante beliefs are sufficiently optimistic.

Keywords: Repeated Bargaining; Uncertain Value Distributions; Revenue Comparison; Learning (search for similar items in EconPapers)
JEL-codes: C73 D81 D82 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2008-07, Revised 2009-12
New Economics Papers: this item is included in nep-gth
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Bargaining with uncertain value distributions (2013)
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:crd:wpaper:08005

Access Statistics for this paper

More papers in Working Papers from Concordia University, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Economics Department ().