Endogenous reference points in bargaining

Bargaining Problems with Arbitrary Reference Points

A number of authors have enriched Nash’s original bargaining problem through the introduction of an additional point, which we call a salient point. When the salient point is restricted to lie in the bargaining set, it is interpreted as a reference point, the outcome, perhaps, of a bargain from an earlier period. When restricted to lie outside the bargaining set, it is interpreted as a claim on...

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...

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 ...

Legislative Bargaining with Endogenous Rules