Abstract

http://ssrn.com/abstract=1880939
 
 

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Bargaining with Asymmetric Costs for Information


Vincent Glode


University of Pennsylvania - The Wharton School

Richard Lowery


University of Texas-Austin

July 7, 2011


Abstract:     
We generalize and correct a model of bargaining with endogenous information acquisition proposed by Dang (2008). Allowing for asymmetric information costs, we show that the opportunity to obtain information during the bargaining process can lead to inefficient outcomes when the responder's cost of obtaining this information is low. We then show that, for very low costs, this inefficiency is robust to allowing agents to voluntarily increase their own information costs and potentially eliminate adverse selection problems.

Number of Pages in PDF File: 32

Keywords: Bargaining, Information Acquisition, Adverse Selection

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Date posted: July 8, 2011  

Suggested Citation

Glode, Vincent and Lowery, Richard, Bargaining with Asymmetric Costs for Information (July 7, 2011). Available at SSRN: http://ssrn.com/abstract=1880939 or http://dx.doi.org/10.2139/ssrn.1880939

Contact Information

Vincent Glode
University of Pennsylvania - The Wharton School ( email )
3641 Locust Walk
Philadelphia, PA 19104-6365
United States
Richard Lowery (Contact Author)
University of Texas-Austin ( email )
Red McCombs School of Business
Austin, TX 78712
United States
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