The Effects of Delay in Bargaining: Evidence from eBay

57 Pages Posted: 17 Mar 2023 Last revised: 23 Apr 2024

See all articles by Jessica Fong

Jessica Fong

University of Michigan Ross School of Business

Caio Waisman

Northwestern University

Date Written: March 13, 2023

Abstract

Delay in negotiations is common in many settings, but the effects of delay have rarely been studied empirically in the field. We measure the causal effect of delay using data from millions of negotiations on eBay. We find that for both buyers and sellers, the longer the bargaining party delays, the less likely the opponent is to continue the negotiation by countering. However, the downstream consequences vary. The more the seller delays, the more likely the negotiation will fail, but the more the buyer delays, the more likely the seller will accept the buyer's offer. The effects of delay are robust; they exist even under short amounts of delay (under 6 hours) and for negotiations for low-priced goods. We find that these effects are consistent with models of strategic delay, in which delay acts as a signal of bargaining power.

Keywords: bargaining

JEL Classification: C78, D83, L81

Suggested Citation

Fong, Jessica and Waisman, Caio, The Effects of Delay in Bargaining: Evidence from eBay (March 13, 2023). Available at SSRN: https://ssrn.com/abstract=4387538 or http://dx.doi.org/10.2139/ssrn.4387538

Jessica Fong (Contact Author)

University of Michigan Ross School of Business ( email )

701 Tappan Ave
Ann Arbor, MI 48109
United States

Caio Waisman

Northwestern University ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

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