Bargaining collectively ∗

Many bargaining situations take place between a central agent and a group of individuals acting collectively where (i) the proposals are restricted to treat all the group members equally, (ii) the decisions of the group are reached through a voting process, and (iii) the vote binds all the members of the group. Examples include debt restructuring negotiations between a troubled company and its bondholders; shareholder votes on executive compensation; and collective bargaining between a firm and union members. We study how the equilibrium payoffs of such bargaining situations depend on the decision rule adopted by the group. Preliminary and incomplete. Comments welcome. Working title (subject to change). We thank Paolo Fulghieri, Bilge Yılmaz, and audiences at the American Law and Economics Conference, the Federal Reserve Bank of Cleveland, Duke University, Gerznesee, the Laffont Memorial Conference, Northwestern University, the University of Oxford, the University of Pennsylvania, the Federal Reserve Bank of Philadelphia, the Texas Finance Festival, and the World Congress of the Econometric Society for helpful comments. Eraslan thanks the National Science Foundation and the Rodney White Center for financial support. Any remaining errors are our own.