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Commitment and Conflict in Bilateral Bargaining

Author

Listed:
  • Tore Ellingsen
  • Topi Miettinen

Abstract

Building on previous work by Schelling and Crawford, we study a model of bilateral bargaining in which negotiators can make binding commitments at a low positive cost c. Most of our results concern outcomes that survive iterated strict dominance. If commitment attempts never fail, there are three such outcomes. In two of them, all the surplus goes to one player. In the third, there is a high probability of conflict. If commitment attempts succeed with probability q

Suggested Citation

  • Tore Ellingsen & Topi Miettinen, 2008. "Commitment and Conflict in Bilateral Bargaining," American Economic Review, American Economic Association, vol. 98(4), pages 1629-1635, September.
  • Handle: RePEc:aea:aecrev:v:98:y:2008:i:4:p:1629-35
    Note: DOI: 10.1257/aer.98.4.1629
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    References listed on IDEAS

    as
    1. John C. Harsanyi & Reinhard Selten, 1988. "A General Theory of Equilibrium Selection in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582384, March.
    2. Muthoo, Abhinay, 1996. "A Bargaining Model Based on the Commitment Tactic," Journal of Economic Theory, Elsevier, vol. 69(1), pages 134-152, April.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Dutta, Rohan & Ishii, Ryosuke, 2016. "Dynamic commitment games, efficiency and coordination," Journal of Economic Theory, Elsevier, vol. 163(C), pages 699-727.
    2. Forslid, Rikard & Nyberg, Sten, 2017. "Brexit - balancing trade and mobility?," CEPR Discussion Papers 12370, C.E.P.R. Discussion Papers.
    3. repec:eee:gamebe:v:109:y:2018:i:c:p:1-20 is not listed on IDEAS
    4. Dutta, Rohan, 2012. "Bargaining with revoking costs," Games and Economic Behavior, Elsevier, vol. 74(1), pages 144-153.
    5. Britz, Volker, 2013. "Optimal value commitment in bilateral bargaining," Games and Economic Behavior, Elsevier, vol. 77(1), pages 345-351.
    6. Matthew O. Jackson & Massimo Morelli, 2011. "The Reasons for Wars: An Updated Survey," Chapters,in: The Handbook on the Political Economy of War, chapter 3 Edward Elgar Publishing.
    7. Seres, Gyula, 2019. "Uncertain Commitment Power in a Durable Good Monopoly," Discussion Paper 201-012, Tilburg University, Center for Economic Research.
    8. Ellingsen, Tore & Paltseva, Elena, 2012. "The private provision of excludable public goods: An inefficiency result," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 658-669.
    9. repec:eee:joreco:v:47:y:2019:i:c:p:11-16 is not listed on IDEAS
    10. Asheim, Geir B. & Perea, Andrés, 2017. "Algorithms for cautious reasoning in games," Memorandum 10/2017, Oslo University, Department of Economics, revised 19 Nov 2018.
    11. David Malueg, 2010. "Mixed-strategy equilibria in the Nash Demand Game," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 44(2), pages 243-270, August.
    12. Heller, Yuval & Sturrock, David, 2017. "Promises and Endogenous Reneging Costs," MPRA Paper 78803, University Library of Munich, Germany.
    13. Miettinen, Topi & Perea, Andrés, 2015. "Commitment in alternating offers bargaining," Mathematical Social Sciences, Elsevier, vol. 76(C), pages 12-18.
    14. Li, Duozhe, 2011. "Commitment and compromise in bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 77(2), pages 203-211, February.
    15. repec:spr:mathme:v:88:y:2018:i:2:d:10.1007_s00186-018-0636-2 is not listed on IDEAS
    16. Ellingsen, Tore & Miettinen, Topi, 2014. "Tough negotiations: Bilateral bargaining with durable commitments," Games and Economic Behavior, Elsevier, vol. 87(C), pages 353-366.

    More about this item

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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