The Effects of Delay in Bargaining: Evidence from eBay

Delay in negotiations is common in many settings, but the effects of delay have rarely been studied empirically in the field. We measure the causal effects of delay on bargaining outcomes using data from millions of negotiations on eBay. We find that for both buyers and sellers, the longer the bargaining party delays, the less likely the opponent is to continue the negotiation by countering, and the fewer rounds the negotiation takes to complete. The effects of delay are robust; they exist even under short amounts of delay (under six hours) and for negotiations for low-priced goods. We find that these effects are consistent with models of strategic delay, in which delay acts as a signal of bargaining power. This paper was accepted by Raphael Thomadsen, marketing. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2023.01562 .