Optimism, deadline effect, and stochastic deadlines
By: Muhamet Yildiz
Contributors: Massachusetts Institute of Technology. Dept. of Economics
Series: Working paper series / Massachusetts Institute of Technology, Dept. of Economics -- working paper 04-36; Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 04-36.
Publisher: Massachusetts Institute of Technology, Dept. of Economics
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Number of pages: 14
Description: Under a firm deadline, agreement in bargaining is often delayed until the deadline. I propose a rationale for this deadline effect that naturally comes from the parties' optimism about their bargaining power. I then show that the deadline effect disappears if the deadline is stochastic and the offers are made arbitrarily frequently. Keywords: optimism, deadline effect, bargaining. JEL Classifications: C72, C73.
Notes: "August 2004."

Includes bibliographical references (p. 13-14).

Abstract in HTML and working paper for download in PDF available via World Wide Web at the Social Science Research Network.