{"title":"Take-it-or-leave-it offers in negotiations: Behavioral types and endogenous deadlines","authors":"Selçuk Özyurt","doi":"10.1016/j.joep.2022.102588","DOIUrl":null,"url":null,"abstract":"<div><p>This paper studies a reputational bargaining model, and investigates the effects of “<em>exit threat</em>” on negotiators’ equilibrium behaviors. Although it is a purely cheap talk message, exit threat is effective and has two main effects: (1) it renders the final outcome efficient and unique, and (2) shifts the bargaining power towards the negotiator who can make this threat. Setting a deadline for negotiations pressures the opponent and incentivizes her to compromise. However, a deadline that is too early makes the opponent less willing to compromise. Thus, effective deadline is uniquely determined. Last minute agreements occur with a positive probability if negotiators cannot reach an immediate agreement. Frequency of agreement has peaks at the beginning and at the end of negotiations (deadline effect), and is flat otherwise.</p></div>","PeriodicalId":48318,"journal":{"name":"Journal of Economic Psychology","volume":null,"pages":null},"PeriodicalIF":2.5000,"publicationDate":"2023-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"2","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Economic Psychology","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0167487022001003","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 2
Abstract
This paper studies a reputational bargaining model, and investigates the effects of “exit threat” on negotiators’ equilibrium behaviors. Although it is a purely cheap talk message, exit threat is effective and has two main effects: (1) it renders the final outcome efficient and unique, and (2) shifts the bargaining power towards the negotiator who can make this threat. Setting a deadline for negotiations pressures the opponent and incentivizes her to compromise. However, a deadline that is too early makes the opponent less willing to compromise. Thus, effective deadline is uniquely determined. Last minute agreements occur with a positive probability if negotiators cannot reach an immediate agreement. Frequency of agreement has peaks at the beginning and at the end of negotiations (deadline effect), and is flat otherwise.
期刊介绍：
The Journal aims to present research that will improve understanding of behavioral, in particular psychological, aspects of economic phenomena and processes. The Journal seeks to be a channel for the increased interest in using behavioral science methods for the study of economic behavior, and so to contribute to better solutions of societal problems, by stimulating new approaches and new theorizing about economic affairs. Economic psychology as a discipline studies the psychological mechanisms that underlie economic behavior. It deals with preferences, judgments, choices, economic interaction, and factors influencing these, as well as the consequences of judgements and decisions for economic processes and phenomena. This includes the impact of economic institutions upon human behavior and well-being. Studies in economic psychology may relate to different levels of aggregation, from the household and the individual consumer to the macro level of whole nations. Economic behavior in connection with inflation, unemployment, taxation, economic development, as well as consumer information and economic behavior in the market place are thus among the fields of interest. The journal also encourages submissions dealing with social interaction in economic contexts, like bargaining, negotiation, or group decision-making. The Journal of Economic Psychology contains: (a) novel reports of empirical (including: experimental) research on economic behavior; (b) replications studies; (c) assessments of the state of the art in economic psychology; (d) articles providing a theoretical perspective or a frame of reference for the study of economic behavior; (e) articles explaining the implications of theoretical developments for practical applications; (f) book reviews; (g) announcements of meetings, conferences and seminars.
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