REPUTATION IN BARGAINING: NATIONAL FOOTBALL LEAGUE CONTRACT NEGOTIATIONS

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Abstract
This article examines a sequence of two bargaining games where a single buyer participates in both. The bargaining games are modeled with two‐sided private information and are “linked” through the buyer's valuation, which is positively correlated across bargaining games. I empirically test the comparative static results obtained from the model's unique equilibrium outcome using National Football League (NFL) contract data. The empirical results suggest that an NFL team's contract negotiations are affected by not only the terms agreed to in the team's prior contract negotiations but also the length of time required to negotiate these prior contracts.