Waiting to Persuade

S-Tier
Journal: Quarterly Journal of Economics
Year: 2004
Volume: 119
Issue: 1
Pages: 223-248

Score contribution per author:

8.043 = (α=2.01 / 1 authors) × 4.0x S-tier

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

Abstract

I analyze a sequential bargaining model in which players are optimistic about their bargaining power (measured as the probability of making offers), but learn as they play the game. I show that there exists a uniquely predetermined settlement date, such that in equilibrium the players always reach an agreement at that date, but never reach one before it. Given any discount rate, if the learning is sufficiently slow, the players agree immediately. I show that, for any speed of learning, the agreement is delayed arbitrarily long, provided that the players are sufficiently patient. Therefore, although excessive optimism alone cannot cause delay, it can cause long delays if the players are expected to learn.

Technical Details

RePEc Handle
repec:oup:qjecon:v:119:y:2004:i:1:p:223-248.
Journal Field
General
Author Count
1
Added to Database
2026-01-29