The Efficiency of Negotiations with Uncertainty and Multi-Dimensional Deals
35 Pages Posted: 30 Apr 2018 Last revised: 26 Oct 2021
Date Written: April 1, 2018
We develop a noncooperative theory of negotiation in which deals have multiple dimensions that can be bundled together. We use theory and experiments to show that in such settings efficient trade is possible even with substantial asymmetric information. The benefits of identifying areas of mutual gain guide agents away from posturing and manipulating their share of the pie, and instead to finding the deals that maximize their mutual gains from trade.
Keywords: Negotiation, Bargaining, Exchange, Trade, Multiple Items, Linking, Efficiency, Experiment
JEL Classification: A13, C72, C78, D47, D82, C92
Suggested Citation: Suggested Citation