This paper studies the effects of the transparency of an outside option in bilateral bargaining. A seller posts prices to screen a buyer over time, and the buyer may receive an outside option at a random time. We consider two information regimes, one in which the arrival of the outside option is public and one in which the arrival is private. The public arrival of the outside option works as a ...

This paper, by introducing complexity considerations, provides a dynamic foundation for the Coase Theorem and highlights the role of transaction costs in generating inefficient outcomes in bargaining/negotiation. We show that, when the players have a preference for less complex strategies, the Coase Theorem is valid in negotiation models with repeated surplus and endogenous disagreement payoffs...

As Ronald Coase and others have shown, deducing the appropriate role of government in economy requires a comparative institutions approach. Trying to generalize from oversimplified specifications regarding transaction costs, according whether exclusion is possible or not, futile exercise. An alternative Ostrom matrix distinguish private, club, collective consumption goods their technical charac...