This paper studies a bargaining problem in which the buyer's valuation and outside option are private information. Dongkyu Chang and Jong Jae Lee show that there exists a non-stationary equilibrium in which the seller can secure full commitment profit (from the optimal sales mechanism that exhibits price skimming) if and only if the buyer's outside option takes a zero value with positive probability (non-negligibly zero outside option). Their innovation is to show that (i) both the Coasean reversion and positive selection are necessary for the seller to secure the full commitment profit and (ii) the Coasean equilibria may coexist with positive selection despite their claimed incompatibility if the non-negligibly zero outside option exists.
Chang, Dongkyu; Lee, Jong Jae "Price skimming:
Commitment and delay in bargaining with outside option." October 2022: In: Journal of Economic
Theory. Vol. 205
Reference:
https://www.sciencedirect.com/science/article/pii/S0022053122001181?via%3Dihub
