This paper reviews recent work on macroeconomic management with varying wage/pricebargaining organizational structures and degrees of credible commitment to monetary conservatism. The emerging literature synthesizes and extends theory and empirics on central bank independence (CBI) and coordinated wage/price bargaining (CWB), arguing that the degrees of CBI and CWB interact, with each other and...

Among the most important and robust violations of rationality are the attraction and the compromise effects. The compromise effect refers to the tendency of individuals to choose an intermediate option in a choice set, while the attraction effect refers to the tendency to choose an option that dominates some other options in the choice set. This paper argues that both effects may result from an...

I study a dynamic one-sided-offer bargaining model between a seller and a buyer under incomplete information. The seller knows the quality of his product while the buyer does not. During bargaining, the seller may receive an outside option, the value of which depends on the quality of the product. If the outside option is sufficiently important, there is an equilibrium in which the uninformed b...