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A sequential bargaining protocol for land rental arrangements

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  • Alfredo Valencia-Toledo

    (Universidad Nacional de San Antonio Abad del Cusco)

  • Juan Vidal-Puga

    (Universidade de Vigo)

Abstract

We consider land rental between a single tenant and several lessors. The tenant should negotiate sequentially with each lessor for the available land. In each stage, we apply the Nash bargaining solution, as a short-cut to solving non-cooperative bargaining games. Our results imply that, when all land is necessary, a uniform price per unit is more favorable for the tenant than a lessor-dependent price. Furthermore, a lessor is better off with a lessor-dependent price only when negotiating first. For the tenant, lessors’ merging is relevant with lessor-dependent price but not with uniform price.

Suggested Citation

  • Alfredo Valencia-Toledo & Juan Vidal-Puga, 2020. "A sequential bargaining protocol for land rental arrangements," Review of Economic Design, Springer;Society for Economic Design, vol. 24(1), pages 65-99, June.
    • Handle: RePEc:spr:reecde:v:24:y:2020:i:1:d:10.1007_s10058-020-00230-7
    DOI: 10.1007/s10058-020-00230-7
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    Cited by:

    1. Matsushima, Noriaki & Shinohara, Ryusuke, 2019. "Pre-negotiation commitment and internalization in public good provision through bilateral negotiations," Journal of Public Economics, Elsevier, vol. 175(C), pages 84-93.

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    More about this item

    Keywords

    Bargaining; Non-cooperative game; Nash solution; Land rental;
    All these keywords.

    JEL classification:

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

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