Rent Shifting And The Order Of Negotiations
- Topics:
- Negotiations and Contracts
- Tags:
- Buyer,
- Finance,
- Free Trade,
- Negotiation,
- Seller
- Source:
- Duke University
FREE Registration is required
Overview: When two sellers negotiate terms of trade with a common buyer, the order in which the negotiations occur can affect the buyer's payoff. This suggests that the buyer may have preferences over which seller to negotiate with first. It was found that when the efficient outcome calls for the buyer to purchase from only one seller, the buyer weakly prefers to negotiate first with the inefficient seller, and when the efficient outcome calls for the buyer to purchase from both sellers, the buyer prefers to negotiate first with the seller that has less bargaining power, or offers a smaller stand-alone surplus, all else being equal. These conclusions hold whether or not penalty clauses are feasible.
(Is this item miscategorized? Does it need more tags? Let us know.)
Format: PDF | Size: 144KB | Date: Dec 2006 | Pages: 26
People who downloaded this item also downloaded
 |
Buyer Groups As Strategic Commitments |
|
Getting Started With E-Commerce |
|
Strategic Dynamic Sourcing From Competing Suppliers |
|
ABCs Of Buyer/Seller Relationships |
|
Is Your Buyer Aware Enough To Buy? |
