Confidentiality and Competition in Concurrent Bargaining

Abstract

I analyze a dynamic model of concurrent bargaining in which multiple long-lived prospective buyers compete to trade with a long-lived seller over two periods. The paper investigates how offer confidentiality and buyer participation affect bargaining dynamics within this framework. When buyers’ past offers are kept confidential, they can competitively engage in “price experimentation” (i.e., risking an initial loss to enjoy a future information rent). As a result, the seller can benefit from maintaining offer confidentiality and reducing the number of buyers participating in the confidential bargaining game, even in the absence of buyer entry costs.

Keywords: bargaining, asymmetric information

JEL Classification: C78, D82