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Bargaining Frictions, Bargaining Procedures and Implied Costs in Multiple-Issue Bargaining

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Author Info
Busch, Lutz-Alexander
Horstmann, Ignatius J

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Abstract

This paper explores how bargaining frictions and bargaining procedures interact to determine players' bargaining costs in multiple-issue bargaining settings. When bargaining frictions take the form of discounting and agreements are implemented as they are reached, issue-by-issue negotiation can generate bargaining costs different from those that occur if all issues are bargained simultaneously. These cost differences result in differences in allocations across bargaining procedures such that players disagree on the desired method of bargaining. Similar results hold for certain fixed-cost bargaining friction specifications. This analysis provides a potential explanation of both agenda bargaining and incomplete contracts. Copyright 1997 by The London School of Economics and Political Science

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Publisher Info
Article provided by London School of Economics and Political Science in its journal Economica.

Volume (Year): 64 (1997)
Issue (Month): 256 (November)
Pages: 669-80
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Handle: RePEc:bla:econom:v:64:y:1997:i:256:p:669-80

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  1. Francesca Flamini, . "Strategic Effects and Incentives in Multi-issue Bargaining Games," Working Papers 2005_5, Department of Economics, University of Glasgow. [Downloadable!]
  2. Ignatius J. Horstmann & James R. Markusen & Jack Robles, 2001. "Multi-Issue Bargaining and Linked Agendas: Ricardo Revisited or No Pain No Gain," NBER Working Papers 8347, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Aviad Heifetz & Clara Ponsati, 2007. "All in good time," International Journal of Game Theory, Springer, vol. 35(4), pages 521-538, April. [Downloadable!] (restricted)
  4. Roberto Serrano, 2007. "Bargaining," Working Papers 2007-06, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales. [Downloadable!]
  5. Francesca Flamini, . "First Things First? The Agenda Formation Problem for Multi-issue Committees," Working Papers 2001_19, Department of Economics, University of Glasgow. [Downloadable!]
    Other versions:
  6. Francesca Flamini, . "A Note on Agenda Restrictions in Multi-Issue Bargaining," Working Papers 2003_15, Department of Economics, University of Glasgow. [Downloadable!]
  7. Francis Bloch & Geoffroy De Clippel, 2008. "Cores of combined games," Working Papers hal-00356298_v1, HAL. [Downloadable!]
    Other versions:
  8. D r. (elect.) Julia Korosteleva, . "Maximising Seigniorage and Inflation Tax: The Case of Belarus," Working Papers 2006_5, Department of Economics, University of Glasgow. [Downloadable!]
  9. Francesca Flamini, 2007. "Best Agendas in Multi-Issue Bargaining," The B.E. Journal of Theoretical Economics, Berkeley Electronic Press, vol. 7(1). [Downloadable!]
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