Price Experimentation in Confidential Negotiations

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Abstract/Contents

Abstract: I develop a model in which a long-lived seller concurrently negotiates with multiple long-lived buyers over two periods. Within this framework, I consider two protocols: a public negotiation process and a confidential negotiation process. In the confidential negotiation process, buyers competitively engage in “price experimentation”: they sacrifice initial profits so that they can enjoy informational advantages over competitors later. Due to this channel, the seller benefits from (1) maintaining confidentiality over past offers and (2) reducing the number of buyers in the confidential negotiation process, even without any entry cost.

Type of resource	text
Date created	August 19, 2021

DOI	https://doi.org/10.25740/mp063bw7310
Location	https://purl.stanford.edu/mp063bw7310

Use and reproduction: User agrees that, where applicable, content will not be used to identify or to otherwise infringe the privacy or confidentiality rights of individuals. Content distributed via the Stanford Digital Repository may be subject to additional license and use restrictions applied by the depositor.
License: This work is licensed under a Creative Commons Attribution 4.0 International license (CC BY).

Preferred citation: Lee, J. (2022). Price Experimentation in Confidential Negotiations. Stanford Digital Repository. Available at https://purl.stanford.edu/mp063bw7310

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