Strategic bargaining with destructive power
This paper studies a two-player alternating offers bargaining model in which one of the agents has the ability to damage permanently the ``pie'' bargained over. I show how this feature can result in an increase of the cost of rejecting an offer for the ``non-harming player''. Beside the ``Rubinstenian'' bilateral monopoly outcome, I show that it is possible to select a ``harming'' equilibrium in which the sequence of damages to the pie is endogenously determined and payoffs do not vary monotonically with the discount factor.
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References listed on IDEAS
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- Raquel Fernandez & Jacob Glazer, 1989.
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320, Massachusetts Institute of Technology (MIT), Department of Economics.
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- Busch, L-A. & Wen, Q., 1991.
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9108, University of Western Ontario, The Centre for the Study of International Economic Relations.
- Avery Christopher & Zemsky Peter B., 1994. "Money Burning and Multiple Equilibria in Bargaining," Games and Economic Behavior, Elsevier, vol. 7(2), pages 154-168, September.
- Lutz-Alexander Bush & Shouyong Shi & Quan Wen, 1998. "Bargaining with Surplus Destruction," Canadian Journal of Economics, Canadian Economics Association, vol. 31(4), pages 915-932, November.
- repec:exe:wpaper:96/17 is not listed on IDEAS
- Manzini, Paola, 1997.
"Strategic wage bargaining with destructive power: the role of commitment,"
Elsevier, vol. 54(1), pages 15-22, January.
- Manzini, P., 1996. "Strategic Wage Bargaining with Destructive Power : The Role of Commitment," Discussion Papers 9617, Exeter University, Department of Economics.
- Muthoo Abhinay, 1995. "Bargaining in a Long-Term Relationship with Endogenous Termination," Journal of Economic Theory, Elsevier, vol. 66(2), pages 590-598, August.
- Sakovics Jozsef, 1993. "Delay in Bargaining Games with Complete Information," Journal of Economic Theory, Elsevier, vol. 59(1), pages 78-95, February.
- Perry Motty & Reny Philip J., 1993. "A Non-cooperative Bargaining Model with Strategically Timed Offers," Journal of Economic Theory, Elsevier, vol. 59(1), pages 50-77, February.
- repec:fth:harver:1432 is not listed on IDEAS
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