How can firms optimally negotiate bilateral contracts with each other in a financial network? Every firm seeks to maximize the utility it gains from its portfolio of contracts. We focus on mean-variance utilities, where each firm has its own beliefs about the expected returns of the contracts and the covariances between them (Markowitz, J. Finance 7(11), 1952). Instead of revealing these beliefs, a firm may adopt a different negotiating position, seeking better contract terms. We formulate a contract negotiation process by which such strategic behavior leads to a network of contracts. In our formulation, any subset of firms can be strategic. The negotiating positions of these firms can form Nash equilibria, where each firm's position is optimal given the others' positions. We give a polynomial-time algorithm to find the Nash equilibria, if they exist, and certify their nonexistence otherwise. We explore the implications of such equilibria on several model networks. These illustrate that firms' utilities can be sensitive to their negotiating position. We then propose trade deadlines as a mechanism to reduce the need for strategic behavior. At the deadline, each firm can unilaterally cancel some or all of its contracts, for a penalty. In our model networks, we show that trade deadlines can reduce the loss of utility from being honest. We empirically verify our insights using data on international trade between 46 large economies.

翻译：企业如何在金融网络中优化地谈判双边合同？每家企业都试图最大化其从合同组合中获得的效用。我们聚焦于均值-方差效用，其中每家企业对合同的预期收益及合同间的协方差持有自身信念（Markowitz, J. Finance 7(11), 1952）。企业可能不披露这些信念，而是采取不同的谈判立场以寻求更优的合同条款。我们构建了一个合同谈判过程，使得此类战略行为导致一个合同网络的形成。在我们的表述中，任意子集的企业均可采取战略行为。这些企业的谈判立场可以构成纳什均衡，其中每家企业的立场在其他企业立场给定的情况下是最优的。我们给出一个多项式时间算法来寻找纳什均衡（若存在），并在不存在时证明其无解。我们探讨了此类均衡在若干模型网络中的含义，表明企业的效用可能对其谈判立场敏感。随后，我们提出交易截止日期作为一种减少战略行为需求的机制。在截止日期前，每家企业可以单方面取消其部分或全部合同，同时支付罚金。在我们的模型网络中，我们证明交易截止日期可以减少因诚信而损失的效用。我们利用46个大型经济体之间的国际贸易数据实证验证了上述见解。