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 language | English |
|---|---|
| Pages (from-to) | 645-665 |
| Number of pages | 21 |
| Journal | Games and Economic Behavior |
| Volume | 102 |
| DOIs | |
| Publication status | Published - 2017 Mar 1 |
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All Science Journal Classification (ASJC) codes
- Finance
- Economics and Econometrics
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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 journal › Article
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 -