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How Status Seeking may Prevent Coasean Bargaining

Author

Listed:
  • Grolleau Gilles

    (SUPAGRO-LAMETA, 34060Montpellier Cedex 2, France)

  • Marciano Alain

    (Faculté d’économie, Université de Montpellier, MontpellierF-34960, France)

  • Mzoughi Naoufel

    (Ecodéveloppement, INRA, Avignon, France)

Abstract

Even in a world with zero transaction costs, status seeking can prevent efficient Coasean bargaining. Using simple illustrations and various examples, we show that ignoring this impediment can explain the failure of some negotiations where an efficient bargain seems a priori reachable and expected. Rather than just emphasizing this neglected issue, we discuss various institutional and behavioral strategies by which this impediment can be overcome and even strategically used in socially desirable directions, such as bargaining over status.

Suggested Citation

  • Grolleau Gilles & Marciano Alain & Mzoughi Naoufel, 2018. "How Status Seeking may Prevent Coasean Bargaining," Review of Law & Economics, De Gruyter, vol. 14(2), pages 1-20, July.
  • Handle: RePEc:bpj:rlecon:v:14:y:2018:i:2:p:20:n:6
    DOI: 10.1515/rle-2016-0036
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    More about this item

    Keywords

    bargain; Coase; externalities; market failures; positional concerns; status seeking;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • K10 - Law and Economics - - Basic Areas of Law - - - General (Constitutional Law)

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