Rubinstein's alternating-offers bargaining model is enriched by assuming that players' payoffs in disagreement periods are determined by a normal form game. It is shown that such a model can have multiple perfect equilibria, including inefficient ones, provided that players are sufficiently patient. Delay is possible even though there is perfect information and the players are fully rational. The length of delay depends only on the payoff structure of the disagreement game and not on the discount factor. Not all feasible and individually rational payoffs of the disagreement game can be supported as average disagreement payoffs. Indeed, some negotiation games have a unique perfect equilibrium with immediate agreement.

[Oil and gas firms using the full cost method during 1985-1986 faced a choice between taking a write-down in oil and gas properties or changing to the successful efforts method. In a time-series analysis, the executive bonuses of firms switching to the successful efforts method are found to be associated with accounting income, suggesting the effects of bonus plans on the switch decision. We also show that the firms choosing write-down reported more losses before the write-down during the decision year, and that the bonuses of these firms' executives are not affected by the write-down.]

Mean and variance measures of health information about cholesterol and saturated fat are included in a demand system for fats and oils. A Bayesian model of health risk belief and consumer awareness surveys are the basis for computing these measures. The empirical demand model shows that health information has resulted in significant increases in consumption for corn, cottonseed, and soybean oils and decreased consumption for butter and lard. The predicted demand effects based on the Bayesian information model are more reasonable than predictions from using either a time trend or a simple cumulative cholesterol information index.

Focuses on executive bonus plans and accounting trade-offs in the oil and gas industry during the years 1985-86. Executive bonuses of firms switching to the successful efforts method; Firms that opted for write-down method.