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Cheap Talk Comparisons in Multi-issue Bargaining

Rick Harbaugh
Indiana University - Business Economics and Public Policy; Indiana University - Department of Economics

Archishman Chakraborty
Schulich School, York University; City University of New York, CUNY Baruch College - Zicklin School of Business - Department of Economics and Finance

April 2002

Claremont Colleges Working Paper No. 2002-04

Abstract:
Bargaining over two issues as a bundle permits credible cheap talk about their relative importance even when interests are directly opposed on each issue. The resulting communication gains can exceed the gains from bundling previously identified in the monopoly pricing literature.

Keywords: cheap talk, bargaining, multidimensional cheap talk, multi-issue negotiations

JEL Classifications: D72, D82, D42, C78

Working Paper Series

Date posted: June 06, 2002 ; Last revised: March 22, 2007

Suggested Citation

Harbaugh, Rick and Chakraborty, Archishman, Cheap Talk Comparisons in Multi-issue Bargaining (April 2002). Claremont Colleges Working Paper No. 2002-04. Available at SSRN: http://ssrn.com/abstract=315083 or doi:10.2139/ssrn.315083

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Contact Information

Rick Harbaugh (Contact Author) Indiana University - Business Economics and Public Policy ( email ) 1309 East Tenth Street Bloomington, IN 47405-1701 United States 812-855-2777 (Phone) 812-855-3354 (Fax) HOME PAGE: http://www.bus.indiana.edu/riharbau/
Indiana University - Department of Economics ( email ) Bloomington, IN 47405-6620 United States
Archishman Chakraborty Schulich School, York University ( email ) 4700 Keele Street Toronto, Ontario M3J 1P3 Canada HOME PAGE: http://www.yorku.ca/archish/
City University of New York, CUNY Baruch College - Zicklin School of Business - Department of Economics and Finance ( email ) 17 Lexington Avenue New York, NY 10010 United States