Multi-person Bargaining With Complementarity: Is There Holdout?
AbstractThis paper studies a non-cooperative bargaining problem with one buyer and many sellers, focussing on the tension between the complementarity intrinsic to such a setup and efficiency. We address this problem in a very general setup with a technology that allows for variable degrees of complementarity, a bargaining protocol that is symmetric and allows for both secret, as well as publicly observable offers, and strategies that allow for history dependence. We examine equilibria for all parameter values. Interestingly, and in contrast to most of the literature, we demonstrate that there is a large class of parameter values such that an asymptotically efficient equilibrium with a positive buyer payoff exists - thus demonstrating that strategic holdout is not a serious obstacle to the working of the Coase theorem. For robustness we examine alternative contractual forms, i.e. conditional and equity contracts, as well as variations that allow for multiple project implementation and asymmetric sellers.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 11517.
Date of creation: Oct 2008
Date of revision:
Multi-person bargaining; holdout; complementarity; efficiency; Coase theorem;
Other versions of this item:
- Prabal Roy Chowdhury & Kunal Sengupta, 2008. "Multi-person bargaining with complementarity: Is there holdout?," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 08-10, Indian Statistical Institute, New Delhi, India.
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Serrano Roberto, 1995. "A Market to Implement the Core," Journal of Economic Theory, Elsevier, vol. 67(1), pages 285-294, October.
- Chatterjee, Kalyan & Dutta, Bhaskar, 1998.
"Rubinstein Auctions: On Competition for Bargaining Partners,"
Games and Economic Behavior,
Elsevier, vol. 23(2), pages 119-145, May.
- Chatterjee, K. & Dutta, B., 1994. "Rubinstein auctions: On competition for bargaining partners," Discussion Paper 1994-57, Tilburg University, Center for Economic Research.
- Ariel Rubinstein, 2010.
"Perfect Equilibrium in a Bargaining Model,"
Levine's Working Paper Archive
252, David K. Levine.
- Cai, Hongbin, 2000. "Delay in Multilateral Bargaining under Complete Information," Journal of Economic Theory, Elsevier, vol. 93(2), pages 260-276, August.
- Martin J. Osborne & Ariel Rubinstein, 2005. "Bargaining and Markets," Levine's Bibliography 666156000000000515, UCLA Department of Economics.
- Kyle Hyndman & Debraj Ray, 2007. "Coalition Formation with Binding Agreements," Review of Economic Studies, Oxford University Press, vol. 74(4), pages 1125-1147.
- Debraj Ray & Rajiv Vohra, 1998.
"A Theory of Endogenous Coalition Structures,"
98-1, Brown University, Department of Economics, revised Jan 1998.
- Ray, Debraj & Vohra, Rajiv, 1997.
"Equilibrium Binding Agreements,"
Journal of Economic Theory,
Elsevier, vol. 73(1), pages 30-78, March.
- Bloch, Francis, 1996. "Sequential Formation of Coalitions in Games with Externalities and Fixed Payoff Division," Games and Economic Behavior, Elsevier, vol. 14(1), pages 90-123, May.
- Gul, Faruk, 1989. "Bargaining Foundations of Shapley Value," Econometrica, Econometric Society, vol. 57(1), pages 81-95, January.
- Asami, Yasushi, 1985. "A game-theoretic approach to the division of profits from economic land development," Regional Science and Urban Economics, Elsevier, vol. 18(2), pages 233-246, May.
- Sergiu Hart & Andreu Mas-Colell, 1994.
"Bargaining and value,"
Economics Working Papers
114, Department of Economics and Business, Universitat Pompeu Fabra, revised Feb 1995.
- Chatterjee, Kalyan & Bhaskar Dutta & Debraj Ray & Kunal Sengupta, 1993. "A Noncooperative Theory of Coalitional Bargaining," Review of Economic Studies, Wiley Blackwell, vol. 60(2), pages 463-77, April.
- Perry, Motty & Reny, Philip J, 1994.
"A Noncooperative View of Coalition Formation and the Core,"
Econometric Society, vol. 62(4), pages 795-817, July.
- Perry, M. & Rany, P., 1992. "A Non-Cooperative View of Coalition Formation and the Core," UWO Department of Economics Working Papers 9203, University of Western Ontario, Department of Economics.
- Krishna, Vijay & Serrano, Roberto, 1996. "Multilateral Bargaining," Review of Economic Studies, Wiley Blackwell, vol. 63(1), pages 61-80, January.
- Akira Okada, 2000. "The Efficiency Principle in Non-Cooperative Coalitional Bargaining," The Japanese Economic Review, Japanese Economic Association, vol. 51(1), pages 34-50, 03.
- Hongbin Cai, 2003. "Inefficient Markov perfect equilibria in multilateral bargaining," Economic Theory, Springer, vol. 22(3), pages 583-606, October.
- Flavio Menezes & Rohan Pitchford, 2004. "A model of seller holdout," Economic Theory, Springer, vol. 24(2), pages 231-253, August.
- Okada, Akira, 1996. "A Noncooperative Coalitional Bargaining Game with Random Proposers," Games and Economic Behavior, Elsevier, vol. 16(1), pages 97-108, September.
- Eckart, Wolfgang, 1985. "On the land assembly problem," Journal of Urban Economics, Elsevier, vol. 18(3), pages 364-378, November.
- Jun Xiao, 2012. "Bargaining Order in a Multi-Person Bargaining Game," Department of Economics - Working Papers Series 1150, The University of Melbourne.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.