IDEAS home Printed from https://ideas.repec.org/a/taf/ginixx/v32y2004i3p261-293.html
   My bibliography  Save this article

Holding Out for Concession: The Quest for Gain in the Negotiation of International Agreements

Author

Listed:
  • Jean-Pierre P. Langlois
  • Catherine C. Langlois

Abstract

If the terms of a potential international agreement are interpreted as sharing surpluses generated by cooperation, they can be viewed, on an item by item basis, as giving an advantage to one or the other party. By interpreting bargaining outcomes in terms of gains or losses relative to the status quo , we modify Rubinstein's full information bilateral alternative offers bargaining model, and find that this opens up new bargaining tactics in equilibrium. The Rubinstein solution no longer provides unique resolution to the bargaining problem. Instead, negotiators can choose from a continuum of strategies that involve holding tough positions and waiting for the other to concede. The tactic is visible in negotiations as diverse as Strategic Arms Limitation Talks (SALT) or North American Foreign Trade Agreement (NAFTA). This occurs although our negotiators are assumed to be fully informed about each other's priorities. Given the other's offer, a negotiator can choose optimally from a whole range of counteroffers in our model. But all of these leave her with the same ex ante expected utility. By focusing on the possible outcomes of a given strategy choice, we define an expected ex post evaluation of strategy that discriminates between strategies that were equivalent ex ante . Negotiators who seek to maximize this ex post valuation choose a tough bargaining position, offering less than the Rubinstein share, and wait, hoping that the other side will concede before they do.

Suggested Citation

  • Jean-Pierre P. Langlois & Catherine C. Langlois, 2004. "Holding Out for Concession: The Quest for Gain in the Negotiation of International Agreements," International Interactions, Taylor & Francis Journals, vol. 32(3), pages 261-293, April.
  • Handle: RePEc:taf:ginixx:v:32:y:2004:i:3:p:261-293
    DOI: 10.1080/03050620600837866
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/03050620600837866
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. repec:cup:apsrev:v:97:y:2003:i:01:p:123-133_00 is not listed on IDEAS
    3. Knopf, Jeffrey W., 1993. "Beyond two-level games: domestic–international interaction in the intermediate-range nuclear forces negotiations," International Organization, Cambridge University Press, vol. 47(04), pages 599-628, September.
    4. repec:cup:apsrev:v:89:y:1995:i:04:p:914-924_09 is not listed on IDEAS
    5. Fershtman, Chaim & Judd, Kenneth L & Kalai, Ehud, 1991. "Observable Contracts: Strategic Delegation and Cooperation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(3), pages 551-559, August.
    6. In-Koo Cho, 1990. "Uncertainty and Delay in Bargaining," Review of Economic Studies, Oxford University Press, vol. 57(4), pages 575-595.
    7. Helen V. Milner & B. Peter Rosendorff, 1996. "Trade Negotiations, Information And Domestic Politics: The Role Of Domestic Groups," Economics and Politics, Wiley Blackwell, vol. 8(2), pages 145-189, July.
    8. Paarlberg, Robert, 1997. "Agricultural Policy Reform and the Uruguay Round: Synergistic Linkage in a Two-Level Game?," International Organization, Cambridge University Press, vol. 51(03), pages 413-444, June.
    9. Cai, Hongbin, 2000. "Delay in Multilateral Bargaining under Complete Information," Journal of Economic Theory, Elsevier, vol. 93(2), pages 260-276, August.
    10. R. Harrison Wagner, 1979. "On The Unification of Two-Person Bargaining Theory," Journal of Conflict Resolution, Peace Science Society (International), vol. 23(1), pages 71-101, March.
    11. Binmore, Ken & Piccione, Michele & Samuelson, Larry, 1998. "Evolutionary Stability in Alternating-Offers Bargaining Games," Journal of Economic Theory, Elsevier, vol. 80(2), pages 257-291, June.
    12. Rubinstein, Ariel, 1985. "A Bargaining Model with Incomplete Information about Time Preferences," Econometrica, Econometric Society, vol. 53(5), pages 1151-1172, September.
    13. Haller, Hans & Holden, Steinar, 1997. "Ratification Requirement and Bargaining Power," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(4), pages 825-851, November.
    14. Fernandez, Raquel & Glazer, Jacob, 1991. "Striking for a Bargain between Two Completely Informed Agents," American Economic Review, American Economic Association, vol. 81(1), pages 240-252, March.
    15. Robert Pahre, 1997. "Endogenous Domestic Institutions in Two-Level Games and Parliamentary Oversight of the European Union," Journal of Conflict Resolution, Peace Science Society (International), vol. 41(1), pages 147-174, February.
    16. repec:cup:apsrev:v:91:y:1997:i:04:p:789-805_21 is not listed on IDEAS
    17. Cramton, Peter C & Tracy, Joseph S, 1994. "Wage Bargaining with Time-Varying Threats," Journal of Labor Economics, University of Chicago Press, vol. 12(4), pages 594-617, October.
    18. Helen V. Milner & B. Peter Rosendorff, 1997. "Democratic Politics and International Trade Negotiations," Journal of Conflict Resolution, Peace Science Society (International), vol. 41(1), pages 117-146, February.
    19. Sakovics Jozsef, 1993. "Delay in Bargaining Games with Complete Information," Journal of Economic Theory, Elsevier, vol. 59(1), pages 78-95, February.
    20. James D. Morrow, 1991. "Electoral and Congressional Incentives and Arms Control," Journal of Conflict Resolution, Peace Science Society (International), vol. 35(2), pages 245-265, June.
    21. Hug, Simon & König, Thomas, 2002. "In View of Ratification: Governmental Preferences and Domestic Constraints at the Amsterdam Intergovernmental Conference," International Organization, Cambridge University Press, vol. 56(02), pages 447-476, March.
    22. Tversky, Amos & Kahneman, Daniel, 1986. "Rational Choice and the Framing of Decisions," The Journal of Business, University of Chicago Press, vol. 59(4), pages 251-278, October.
    23. Hongbin Cai, 2003. "Inefficient Markov perfect equilibria in multilateral bargaining," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 22(3), pages 583-606, October.
    24. Jongryn Mo, 1994. "The Logic of Two-Level Games with Endogenous Domestic Coalitions," Journal of Conflict Resolution, Peace Science Society (International), vol. 38(3), pages 402-422, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:ginixx:v:32:y:2004:i:3:p:261-293. 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: (Chris Longhurst). General contact details of provider: http://www.tandfonline.com/GINI20 .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.