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Multilateral bargaining with an endogenously determined procedure

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  • Gao, Hong
  • Xu, Haibo

Abstract

We study a multilateral bargaining game in which a manager negotiates sequentially with several workers to share the units of surplus. The main feature of the game is that the manager determines the order of her bargaining opponents endogenously. The game exhibits double-sided hold-up effects: the manager can hold up the workers by switching between the workers, whereas the workers can hold up the manager by coordinating their moves. The interaction of these hold-up effects results in the multiplicity of equilibrium. Moreover, inefficient delays of agreements can arise in some equilibria, and the delays may not vanish even if the time interval between two offers becomes arbitrarily small.

Suggested Citation

  • Gao, Hong & Xu, Haibo, 2021. "Multilateral bargaining with an endogenously determined procedure," Economics Letters, Elsevier, vol. 209(C).
    • Handle: RePEc:eee:ecolet:v:209:y:2021:i:c:s0165176521004250
    DOI: 10.1016/j.econlet.2021.110148
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    References listed on IDEAS

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    More about this item

    Keywords

    Multilateral bargaining; Endogenous procedure; Multiple equilibria; Delay in equilibrium;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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