Interim third-party selection in bargaining

Research output: Contribution to journalArticle

Abstract

Third-party intervention can reduce the risk of conflict in situations where the bargaining failure is due to asymmetric information. In this paper, I consider the selection of a third party in a two-person bargaining problem where each disputant has private information about its relative strength or weakness. For a class of problems, I find that the disputants choose the third party that is best for the strong type but worst for the weak type due to the incentive of each disputant to avoid seeming weak to their adversary. The selected third party's intervention entails a higher ex ante chance of conflict than intervention by any other alternative. This paper shows how the process of interim third-party selection can have important consequences for the outcome of a third-party intervention in bargaining.

Original languageEnglish
Pages (from-to)645-665
Number of pages21
JournalGames and Economic Behavior
Volume102
DOIs
Publication statusPublished - 2017 Mar 1

Fingerprint

Third-party intervention
Asymmetric information
Incentives
Private information
Bargaining problem

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

Cite this

@article{cbaa4033b3ce47fbb174e2e873326e2e,
title = "Interim third-party selection in bargaining",
abstract = "Third-party intervention can reduce the risk of conflict in situations where the bargaining failure is due to asymmetric information. In this paper, I consider the selection of a third party in a two-person bargaining problem where each disputant has private information about its relative strength or weakness. For a class of problems, I find that the disputants choose the third party that is best for the strong type but worst for the weak type due to the incentive of each disputant to avoid seeming weak to their adversary. The selected third party's intervention entails a higher ex ante chance of conflict than intervention by any other alternative. This paper shows how the process of interim third-party selection can have important consequences for the outcome of a third-party intervention in bargaining.",
author = "Kim, {Jin Yeub}",
year = "2017",
month = "3",
day = "1",
doi = "10.1016/j.geb.2017.02.013",
language = "English",
volume = "102",
pages = "645--665",
journal = "Games and Economic Behavior",
issn = "0899-8256",
publisher = "Academic Press Inc.",

}

Interim third-party selection in bargaining. / Kim, Jin Yeub.

In: Games and Economic Behavior, Vol. 102, 01.03.2017, p. 645-665.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Interim third-party selection in bargaining

AU - Kim, Jin Yeub

PY - 2017/3/1

Y1 - 2017/3/1

N2 - Third-party intervention can reduce the risk of conflict in situations where the bargaining failure is due to asymmetric information. In this paper, I consider the selection of a third party in a two-person bargaining problem where each disputant has private information about its relative strength or weakness. For a class of problems, I find that the disputants choose the third party that is best for the strong type but worst for the weak type due to the incentive of each disputant to avoid seeming weak to their adversary. The selected third party's intervention entails a higher ex ante chance of conflict than intervention by any other alternative. This paper shows how the process of interim third-party selection can have important consequences for the outcome of a third-party intervention in bargaining.

AB - Third-party intervention can reduce the risk of conflict in situations where the bargaining failure is due to asymmetric information. In this paper, I consider the selection of a third party in a two-person bargaining problem where each disputant has private information about its relative strength or weakness. For a class of problems, I find that the disputants choose the third party that is best for the strong type but worst for the weak type due to the incentive of each disputant to avoid seeming weak to their adversary. The selected third party's intervention entails a higher ex ante chance of conflict than intervention by any other alternative. This paper shows how the process of interim third-party selection can have important consequences for the outcome of a third-party intervention in bargaining.

UR - http://www.scopus.com/inward/record.url?scp=85015836237&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85015836237&partnerID=8YFLogxK

U2 - 10.1016/j.geb.2017.02.013

DO - 10.1016/j.geb.2017.02.013

M3 - Article

AN - SCOPUS:85015836237

VL - 102

SP - 645

EP - 665

JO - Games and Economic Behavior

JF - Games and Economic Behavior

SN - 0899-8256

ER -