Delacroix, Alain; Shi, Shouyong - University of Toronto, Department of Economics - 2007
efficiency of two pricing mechanisms, price posting and bargaining. Each seller chooses investment that determines the quality of … mechanism affects efficiency through the choice of quality and the number of trades. Bargaining induces the efficient choice of … conflict with their role in signaling quality. Focusing on this conflict, we find that bargaining could yield higher efficiency …