Publications [#142515] of Huseyin Yildirim

Other

1. "Information Disclosure and Endogenous Sequencing in Bilateral Negotiations," with Silvana Krasteva, (January 2008). [pdf]
   (last updated on 2008/01/21)

   Abstract:
   A bargaining situation in which one "buyer" engages in bilateral negotiations with two "suppliers" is examined. In addition to players' ability to make an offer in each negotiation, the buyer controls the information flow between negotiations and chooses their order whereas suppliers set expiration dates for their offers. For substitute goods, it is found that in equilibrium, suppliers make "exploding" offers with short expiries to foreclose the future competition, and the buyer (generically) conducts "partially private" negotiations where she discloses the order, but keeps the outcomes private, which leads to an efficient trade. Moreover, despite heterogenous goods and suppliers, the buyer is neutral to the order of negotiations. For complementary goods, the buyer (weakly) prefers "fully private" negotiations where she discloses neither the order nor the outcomes. It is always an equilibrium for both suppliers to make "open-ended" offers with long expiries, though both making exploding offers may also be sustained as equilibrium. With open-ended offers, the buyer is neutral to the order whereas with exploding offers, she follows a proper mixed strategy. In either equilibrium, trade may be inefficient for complements. The inefficiency, however, is less pronounced as more offers become exploding and/or as suppliers gain greater bargaining power vis-a-vis the buyer. Suppliers' incentives to disclose information and its implications for consumer privacy are also explored. JEL Classifications: C70, L23 Keywords: exploding offers, open-ended offers, public negotiations, private negotiations, bargaining power, coordination