In many negotiations, rules are soft in the sense that the seller and/or buyers may break them at some cost. When buyers have private values, we show that the cost of such 'rule bending' is borne entirely by the seller in equilibrium. Consequently, the seller is willing to pay an intermediary to...

In many negotiations, rules are soft in the sense that the seller and/or buyers may break them at some cost. When buyers have private values, we show that the cost of such 'rule bending' is borne entirely by the seller in equilibrium. Consequently, the seller is willing to pay an intermediary to...