Delegation Games with Full Commitment
AbstractIn this paper we present and solve some bargaining games a la Rubinstein, where the subjects can delegate the negotiating process to agents. Delegation is a possible commitment tactic. Its aim is to provide the delegating party with a higher bargaining power. When both the parties delegate, uncertainty arises about the final distribution of the payoffs and multiple equilibria are possible. The seller loses his usual first mover's advantage. When we allow for delegation costs, the range of multiple equilibria shrinks. The final outcome of the game may be now inefficient for the principals and a prisoners' dilemma may arise
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Bibliographic InfoPaper provided by University of Milano-Bicocca, Department of Economics in its series Working Papers with number 70.
Length: 36 pages
Date of creation: Apr 2004
Date of revision: Apr 2004
Find related papers by 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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