Delay as Agenda Setting
Executive Summary — A common business (and life) practice involves delaying a decision in order to avoid immediate commitment. James J. Anton (Fuqua School of Business) and Dennis A. Yao (HBS) discuss ways in which delaying or, alternatively, speeding up commitment can be a valuable tactic, how these tactics influence the actions of other decision makers, and ways in which such actions affect other decisions. Changing the speed at which a decision is made affects how others allocate resources to influence how that and other decisions will eventually be made. The researchers identify two tactics associated with changing decision speed: "pinning" and "focusing." Key concepts include:
- Commitment-avoiding can be a valuable tactic in that delaying a decision will greatly affect the actions of other decision makers-including both allies and rivals.
- Pinning involves taking actions that "pin" a rival decision maker's resources to one decision, thus reducing the rival's influence on other decisions.
- Focusing involves speeding up a decision, which frees up an ally's resources for use on other decisions.
We examine a multi-issue dynamic decision-making process that involves endogenous commitment. Our primary focus is on actions that impact delay, an extreme form of lack of commitment. Delay is strategically interesting when decision makers with asymmetric preferences face multiple issues and have limited resources for influencing outcomes. A delayed decision becomes part of the subsequent agenda, thereby altering the allocation of resources. The opportunity to delay decisions leads the players to act against their short-run interests by changing the expected decision delay. We characterize delay equilibria and explore how delay affects agenda preferences and, when possible, bargaining.