Advanced Search
MyIDEAS: Login to save this paper or follow this series

Transparency, complementarity and holdout

Contents:

Author Info

  • Roy Chowdhury, Prabal
  • Sengupta, Kunal

Abstract

This paper characterizes the conditions under which holdout (i.e. bargaining inefficiency) may, or may not be significant in a two-sided, one-buyer-many-seller model with complementarity. We address this problem in a very general setup with a bargaining protocol that is symmetric and allows for both publicly observable, as well as secret offers, and a technology that allows for variable degrees of complementarity. The central insight is that the transparency of the bargaining protocol, formalized by whether offers are publicly observable or secret, as well as the extent of complementarity, play a critical role in generating efficiency. Even with perfect complementarity, holdout seems to be largely resolved whenever the bargaining protocol is public (but not if it is secret). Further, irrespective of the bargaining protocol, holdout is resolved if the marginal contribution of the last seller is not too large.

Download Info

If 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.
File URL: http://mpra.ub.uni-muenchen.de/17606/
File Function: original version
Download Restriction: no

Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 17606.

as in new window
Length:
Date of creation: Sep 2009
Date of revision:
Handle: RePEc:pra:mprapa:17606

Contact details of provider:
Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC

Related research

Keywords: Multi-person bargaining; holdout; complementarity; efficiency; secret offers; public offers; Coase theorem; transparency.;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. Ray, D. & Vohra, R., 1996. "A Theory of Endogenous Coalition Structure," Papers, Boston University - Industry Studies Programme 68, Boston University - Industry Studies Programme.
  2. Chatterjee, Kalyan & Bhaskar Dutta & Debraj Ray & Kunal Sengupta, 1993. "A Noncooperative Theory of Coalitional Bargaining," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 60(2), pages 463-77, April.
  3. Perry, Motty & Reny, Philip J, 1994. "A Noncooperative View of Coalition Formation and the Core," Econometrica, Econometric Society, Econometric Society, vol. 62(4), pages 795-817, July.
  4. Chatterjee, K. & Dutta, B., 1994. "Rubinstein auctions: On competition for bargaining partners," Discussion Paper, Tilburg University, Center for Economic Research 1994-57, Tilburg University, Center for Economic Research.
  5. Albaek, Svend & Mollgaard, Peter & Overgaard, Per B, 1997. "Government-Assisted Oligopoly Coordination? A Concrete Case," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 45(4), pages 429-43, December.
  6. Krishna, Vijay & Serrano, Roberto, 1996. "Multilateral Bargaining," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 63(1), pages 61-80, January.
  7. Adam B. Jaffe & Josh Lerner & Scott Stern, 2007. "Innovation Policy and the Economy, Volume 7," NBER Books, National Bureau of Economic Research, Inc, number jaff07-1, July.
  8. Kyle Hyndman & Debraj Ray, 2007. "Coalition Formation with Binding Agreements," Review of Economic Studies, Oxford University Press, vol. 74(4), pages 1125-1147.
  9. Hongbin Cai, 2003. "Inefficient Markov perfect equilibria in multilateral bargaining," Economic Theory, Springer, Springer, vol. 22(3), pages 583-606, October.
  10. Akira Okada, 2000. "The Efficiency Principle in Non-Cooperative Coalitional Bargaining," The Japanese Economic Review, Japanese Economic Association, Japanese Economic Association, vol. 51(1), pages 34-50, 03.
  11. Eckart, Wolfgang, 1985. "On the land assembly problem," Journal of Urban Economics, Elsevier, vol. 18(3), pages 364-378, November.
  12. Carl Shapiro, 2001. "Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting," NBER Chapters, in: Innovation Policy and the Economy, Volume 1, pages 119-150 National Bureau of Economic Research, Inc.
  13. Sergiu Hart & Andreu Mas-Colell, 1994. "Bargaining and value," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 114, Department of Economics and Business, Universitat Pompeu Fabra, revised Feb 1995.
  14. Martin J. Osborne & Ariel Rubinstein, 2005. "Bargaining and Markets," Levine's Bibliography 666156000000000515, UCLA Department of Economics.
  15. Flavio Menezes & Rohan Pitchford, 2004. "A model of seller holdout," Economic Theory, Springer, Springer, vol. 24(2), pages 231-253, August.
  16. Ray, D. & Vohra, R., 1993. "Equilibrium Binding Agreements," Papers, Boston University - Department of Economics 21, Boston University - Department of Economics.
  17. Ariel Rubinstein, 2010. "Perfect Equilibrium in a Bargaining Model," Levine's Working Paper Archive 661465000000000387, David K. Levine.
  18. Seidmann, Daniel J & Winter, Eyal, 1998. "A Theory of Gradual Coalition Formation," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 65(4), pages 793-815, October.
  19. Xavier Vives, 2002. "Private Information, Strategic Behavior, and Efficiency in Cournot Markets," RAND Journal of Economics, The RAND Corporation, vol. 33(3), pages 361-376, Autumn.
  20. Timothy Cason & Vai-Lam Mui, 2007. "Communication and coordination in the laboratory collective resistance game," Experimental Economics, Springer, Springer, vol. 10(3), pages 251-267, September.
  21. Okada, Akira, 1996. "A Noncooperative Coalitional Bargaining Game with Random Proposers," Games and Economic Behavior, Elsevier, Elsevier, vol. 16(1), pages 97-108, September.
  22. Cai, Hongbin, 2000. "Delay in Multilateral Bargaining under Complete Information," Journal of Economic Theory, Elsevier, Elsevier, vol. 93(2), pages 260-276, August.
  23. Gul, Faruk, 1989. "Bargaining Foundations of Shapley Value," Econometrica, Econometric Society, Econometric Society, vol. 57(1), pages 81-95, January.
  24. Stiglitz, Joseph E., 1989. "Imperfect information in the product market," Handbook of Industrial Organization, Elsevier, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 13, pages 769-847 Elsevier.
  25. Serrano Roberto, 1995. "A Market to Implement the Core," Journal of Economic Theory, Elsevier, Elsevier, vol. 67(1), pages 285-294, October.
  26. Bloch, Francis, 1996. "Sequential Formation of Coalitions in Games with Externalities and Fixed Payoff Division," Games and Economic Behavior, Elsevier, Elsevier, vol. 14(1), pages 90-123, May.
  27. Asami, Yasushi, 1985. "A game-theoretic approach to the division of profits from economic land development," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 18(2), pages 233-246, May.
  28. Olivier Compte & Philippe Jehiel, 2002. "On the Role of Outside Options in Bargaining with Obstinate Parties," Econometrica, Econometric Society, Econometric Society, vol. 70(4), pages 1477-1517, July.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Prabal Roy Chowdhury, 2010. "Land acquisition: Political intervention, voice and fragmentation," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers, Indian Statistical Institute, New Delhi, India 10-05, Indian Statistical Institute, New Delhi, India.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:17606. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.