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Going Alone Together: Joint Outside Options in Bilateral Negotiations

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  • Paola Manzini
  • Marco Mariotti

Abstract

Several contractual situations are such that the parties may 'step out' of negotiations and take up outside opportunities only if there is mutual consent to do so. Examples include employer - employee negotiations, divorce and inheritance procedures, and arbitration. To analyse such cases we develop the general concept of a 'joint outside option' and study its effect in the standard bargaining game. Examples from the international trade and theory of the firm are considered in some depth. Copyright 2004 Royal Economic Society.

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Bibliographic Info

Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 114 (2004)
Issue (Month): 498 (October)
Pages: 943-960

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Handle: RePEc:ecj:econjl:v:114:y:2004:i:498:p:943-960

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Cited by:
  1. Juan Vidal-Puga, 2005. "Reinterpreting the meaning of breakdown," Game Theory and Information 0501004, EconWPA.
  2. Rong, Kang, 2012. "Alternating-offer games with final-offer arbitration," Games and Economic Behavior, Elsevier, vol. 76(2), pages 596-610.
  3. Juan Vidal-Puga, 2008. "Delay in the alternating-offers model of bargaining," International Journal of Game Theory, Springer, vol. 37(4), pages 457-474, December.
  4. Franz Wirl, 2009. "Non-cooperative investment in partnerships and their termination," Central European Journal of Operations Research, Springer, vol. 17(4), pages 479-494, December.

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