Jamal Awil

← The Strategy of Conflict

A credible commitment can end all bargaining instantly. [causal]

Consider a culture in which "cross my heart" is universally recognized as absolutely binding. Any offer accompanied by this invocation is a final offer, and is so recognized. If each party knows the other's true reservation price, the object is to be first with a firm offer. Complete responsibility for the outcome then rests with the other, who can take it or leave it as he chooses (and who chooses to take it). Bargaining is all over; the commitment (that is, the first offer) wins.

DEFINE: Illustrates the concept of a binding commitment that preempts negotiation.

Thomas C. Schelling, The Strategy of Conflict, loc. 69