Project description DEENESFRITPL How to solve the basic bargaining problem When selling, buying or exchanging goods and services, as is the case with every type of business transaction, there’s usually a certain level of bargaining involved. The price, for instance, is debated between the buyer and seller. However, our knowledge about bargaining with two-sided asymmetric information remains limited. The ERC-funded InfoTrans project will develop a new way to analyse markets with asymmetric information. Specifically, it will analyse dynamic pricing by privately informed sellers in markets with independent values. Focusing on various markets (real estate, durable goods, intermediate goods and financial markets), InfoTrans will also consider interdependent values and multilateral settings with multiple sellers. Show the project objective Hide the project objective Objective This proposal studies price negotiations in dynamic markets. The focus is on one of the most primitive economic problems: a seller and a buyer bargain over the price of a good. Their cost and values are private information and, if they do not reach an agreement today, they may continue bargaining tomorrow.Somewhat surprisingly, our knowledge about bargaining with two-sided asymmetric information is still quite limited. Intuitively, on the one hand, signaling forces induce the seller and the buyer to delay trade to obtain a higher share of the trade surplus. One the other hand, Coasian forces push prices down and make trade efficient. The balance between these two forces determines the efficiency of the market and how the trade surplus is shared between the seller and the buyer.I will provide a new systematic analysis of markets with asymmetric information. Using recent developments in the characterization of robust behavior and strategic stability, I will first analyze dynamic pricing by privately informed sellers in markets with independent values. Building on the understanding of the basic bilateral bargaining problem, I will then consider related problems. In particular, in the second subproject, I will consider interdependent values and, in the third subproject, I will consider a multilateral setting with multiple sellers. Markets studied in this project will include real estate markets, markets for durable goods, markets for intermediate goods, and financial markets. The results will provide guidance to assess the effect that currently debated policies regarding privacy or confidentiality have on social welfare or market efficiency. Programme(s) H2020-EU.1.1. - EXCELLENT SCIENCE - European Research Council (ERC) Main Programme Topic(s) ERC-2020-STG - ERC STARTING GRANTS Call for proposal ERC-2020-STG See other projects for this call Funding Scheme ERC-STG - Starting Grant Host institution RHEINISCHE FRIEDRICH-WILHELMS-UNIVERSITAT BONN Net EU contribution € 719 596,00 Address REGINA PACIS WEG 3 53113 Bonn Germany See on map Region Nordrhein-Westfalen Köln Bonn, Kreisfreie Stadt Activity type Higher or Secondary Education Establishments Links Contact the organisation Opens in new window Website Opens in new window Participation in EU R&I programmes Opens in new window HORIZON collaboration network Opens in new window Total cost € 719 596,00 Beneficiaries (1) Sort alphabetically Sort by Net EU contribution Expand all Collapse all RHEINISCHE FRIEDRICH-WILHELMS-UNIVERSITAT BONN Germany Net EU contribution € 719 596,00 Address REGINA PACIS WEG 3 53113 Bonn See on map Region Nordrhein-Westfalen Köln Bonn, Kreisfreie Stadt Activity type Higher or Secondary Education Establishments Links Contact the organisation Opens in new window Website Opens in new window Participation in EU R&I programmes Opens in new window HORIZON collaboration network Opens in new window Total cost € 719 596,00
