publication . Article . 2011

Bargaining with Optimism

Yildiz, Muhamet;
Open Access
  • Published: 01 May 2011
  • Publisher: Annual Reviews
Abstract
Excessive optimism is a prominent explanation for bargaining delays. Recent results demonstrate that optimism plays a subtle role in bargaining, and its careful analysis may shed valuable insights into negotiation behavior. This article reviews some of these results, focusing on the following findings. First, when there is a nearby deadline, optimistic players delay the agreement to the last period before the deadline, replicating a broad empirical regularity known as the deadline effect. Second, there cannot be a substantial delay under persistent optimism; i.e., excessive optimism alone cannot explain delays. Third, when optimistic players are expected to lear...
Subjects
free text keywords: heterogeneous priors, delay, jel:C78, jel:D74, jel:D03, jel:D84, jel:C73
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publication . Article . 2011

Bargaining with Optimism

Yildiz, Muhamet;