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Abstract:
In alternating-offer bargaining, a seller is “insistent” if she demands the same asking price more than once. We provide empirical evidence on insistence and inform the theoretical literature by analyzing millions of eBay bargaining threads taken from Backus, Blake, Larsen, and Tadelis (2020). Focusing on the best predictors of first-period insistence, we find that insistence is sticky – a seller who was insistent in the past is more likely to be insistent in the future – and a seller is more likely insistent if the buyer has been particularly lenient or tough in her counteroffer.
