Endogenous Bargaining Power

Endogenous bargaining power

We present a novel approach to N-person bargaining, based on the idea that the agreement reached in a negotiation is determined by how the direct conflict resulting from disagreement would be resolved. Our basic building block is the disagreement function, which maps each set of feasible outcomes into a disagreement point. Using this function and a weak axiom based on individual rationality we ...

Bargaining with endogenous information

This paper analyses information acquisition in ultimatum bargaining with common values. Because of an endogenous lemons problem the equilibriumpayoffs of the agents are non-monotonic in the information cost. The mere possibility of information acquisition can cause no trade although the agents maintain symmetric information in equilibrium and the gain from trade is common knowledge. The agent r...

Bargaining with endogenous deadlines

We develop a two-person negotiation model with complete information that makes endogenous both the deadline and the level of surplus destruction after the deadline. We show that the undominated Nash equilibrium outcome is always unique but might be inefficient. Moreover, as the bargaining period becomes short or as the players become very patient, the unique undominated Nash equilibrium outcome...

Legislative Bargaining with Endogenous Rules

Bargaining over an Endogenous Agenda

We present a model of bargaining in which a committee searches over the policy space, successively amending the default by voting over proposals. Bargaining ends when proposers are unable or unwilling to amend the existing default, which is then implemented. We characterize the policies which can be implemented from any initial default in a pure strategy stationary Markov perfect equilibrium fo...