On the outside-option principle with one-sided options

C-Tier
Journal: Economics Letters
Year: 2020
Volume: 191
Issue: C

Score contribution per author:

1.005 = (α=2.01 / 1 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This note examines a bargaining game in which a single player has an outside option that can be taken in any period of time. If the outside-option value is close to the efficient frontier, then there exist equilibria that contravene the “outside-option principle.” In particular, the player with the outside option may receive significantly less than his/her equilibrium payoff in the game without it. An example of option-contract renegotiation is provided.

Technical Details

RePEc Handle
repec:eee:ecolet:v:191:y:2020:i:c:s0165176520300963
Journal Field
General
Author Count
1
Added to Database
2026-01-29