Dynamic Bargaining with Transaction Costs

Cramton, Peter

doi:10.1287/mnsc.37.10.1221

Cited by 52 publications

(31 citation statements)

References 26 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Time pressure exists for all goods and services since if it does not matter when the good or service is sold, it would not matter whether they were sold at all (Cramton, 1991). The degree of time pressure, however, can differ among different goods and services.…”

Section: Influencing Aspectsmentioning

confidence: 99%

Разработка Метрик Для Бенчмаркинга Персонала С Целью Совершенствования Системы Управления Персоналом В Направлении Инновационного Развития

Карлик¹,

Кречко²,

Платонов³

2018

Russian Journal of Labor Economics

View full text Add to dashboard Cite

show abstract

Section: Influencing Aspectsmentioning

confidence: 99%

Разработка Метрик Для Бенчмаркинга Персонала С Целью Совершенствования Системы Управления Персоналом В Направлении Инновационного Развития

Карлик¹,

Кречко²,

Платонов³

2018

Russian Journal of Labor Economics

View full text Add to dashboard Cite

show abstract

“…The expected profits under the sequential BA are given by Eqs. (5) and (6). The expected profits under the option mechanism are given by Eqs.…”

Section: Comparison Of Expected Profitsmentioning

confidence: 99%

Auctions in the post-change-order period

Lee

Huh

Sun

et al. 2015

Naval Research Logistics

View full text Add to dashboard Cite

A change order is frequently initiated by either the supplier or the buyer, especially when the contract is long‐term or when the contractual design is complex. In response to a change order, the buyer can enter a bargaining process to negotiate a new price. If the bargaining fails, she pays a cancellation fee (or penalty) and opens an auction. We call this process the sequential bargaining‐auction (BA). At the time of bargaining, the buyer is uncertain as to whether the bargained price is set to her advantage; indeed, she might, or might not, obtain a better price in the new auction. To overcome these difficulties, we propose a new change‐order‐handling mechanism by which the buyer has an option to change the contractual supplier after bargaining ends with a bargained price. We call this the option mechanism. By this mechanism, the privilege of selling products or services is transferred to a new supplier if the buyer exercises the option. To exercise the option, the buyer pays a prespecified cash payment, which we call the switch price, to the original supplier. If the option is not exercised, the bargained price remains in effect. When a switch price is proposed by the buyer, the supplier decides whether or not to accept it. If the supplier accepts it, the buyer opens an auction. The option is exercised when there is a winner in the auction. This article shows how, under the option mechanism, the optimal switch price and the optimal reserve price are determined. Compared to the sequential BA, both the buyer and the supplier benefit. Additionally, the option mechanism coordinates the supply chain consisting of the two parties. © 2015 Wiley Periodicals, Inc. Naval Research Logistics 62: 248–265, 2015

show abstract

“…Later, Rubin and Carter (1990) demonstrated that Banerjee's work can be generalized to a variety of goods and services and showed that compromises by the buyer and the supplier result in improved protability for both. Cramton (1991) proposed a bargaining model with transaction costs between a buyer and a supplier. He suggests that in the state of equilibrium an immediate trade, delayed trade, or immediate termination occurs depending on the size of the gains from trade and relative bargaining costs.…”

Section: Analytical Modelsmentioning

confidence: 99%

An agent-based model to support negotiation-based order acceptance in a multi-plant enterprise

Mobini

Behdani

Lukszo

et al. 2011

2011 IEEE International Conference on Systems, Man, and Cybernetics

View full text Add to dashboard Cite

SummaryOrder acceptance (OA) has a large inuence on the performance of an enterprise. On the one hand, always accepting an order when capacity is available may restrict the system to accept more protable orders in the future. On the other hand, rejecting too many orders leads to low capacity utilization and also has repercussions for future customer relations. In addition, accepting too many orders leads to an over-loaded production environment, where lead times increase and orders are delivered late. Most of these aspects of order acceptance decision-making can be handled by having proper negotiations with customers on order terms. However, this is a complex problem primarily because there are dierent actors who have various (conicting) interests, needs and objectives. Accordingly, to provide insight for the decision makers in the rms in order to develop proper strategies for order acceptance, developing appropriate models seems necessary.The objective in this research is to improve the order acceptance performance of a make-to-order multi-plant enterprise (MPE) by incorporating buyer-seller negotiations in its OA procedure with the main research question of How can the buyer-seller negotiation process contribute to the improvement of order acceptance performance in the multi-plant enterprise?For this purpose, we have developed an agent-based model to support order acceptance decisions in a multi-plant enterprise particularly using dierent negotiation settings.The research starts with literature review on order acceptance in general and negotiation in particular. A gap is identied in the OA literature: the major perspectives on the OA procedure rest on the underlying assumption that order terms are already determined which is not always tenable. In reality, order terms are usually specied by negotiation between the buyer and the seller and they are not predetermined. A negotiation-based order acceptance approach is consequently suggested in order to consider the whole activities in a negotiation process with three phases. The proposed process involves the initiation conditions for negotiation (pre-negotiation phase), the main interaction (negotiation phase) and the consequences of negotiation on the future decisions of the involved actors (post-negotiation phase). This negotiation process is a part of more general negotiation framework which is then extended into a negotiation ontology. The ontology introduces the main concepts and their relations in a negotiation problem. Next, the conceptualization of the order negotiation process in OA and the negotiation ontology are used in developing an agent-based model for buyer-seller negotiations in a case of multi-plant enterprise. The general assumptions and settings for model development are taken from a model have been presented by Behdani et al. (2010) for a lube oil multi-plant case study motivated by a real supply chain.In this research, the previous model is extended by incorporating negotiation between the ii enterprise and its customers on order terms. Final...

show abstract

Dynamic Bargaining with Transaction Costs

Cited by 52 publications

References 26 publications

Разработка Метрик Для Бенчмаркинга Персонала С Целью Совершенствования Системы Управления Персоналом В Направлении Инновационного Развития

Разработка Метрик Для Бенчмаркинга Персонала С Целью Совершенствования Системы Управления Персоналом В Направлении Инновационного Развития

Auctions in the post-change-order period

An agent-based model to support negotiation-based order acceptance in a multi-plant enterprise

Contact Info

Product

Resources

About