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The Politics of Compromise

Author

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  • Bonatti, Alessandro
  • Rantakari, Heikki

Abstract

A team must select among competing projects that differ in their payoff consequences for its members. Each agent chooses a project and exerts costly effort affecting its random completion time. When one or more projects are complete, agents bargain over which one to implement. A consensus requirement can (but need not) induce the efficient balance between compromise in project selection and equilibrium effort. Imposing deadlines for presenting counteroffers is beneficial, while delegating decision-making to an impartial third party leads agents to select extreme projects. Finally, hiring agents with opposed interests can foster both effort and compromise in project selection.

Suggested Citation

  • Bonatti, Alessandro & Rantakari, Heikki, 2014. "The Politics of Compromise," CEPR Discussion Papers 9910, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:9910
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. T. Renee Bowen & George Georgiadis & Nicolas S. Lambert, 2016. "Collective Choice in Dynamic Public Good Provision," NBER Working Papers 22772, National Bureau of Economic Research, Inc.
    2. Larouche, Pierre & Schütt, Florian, 2016. "Repeated Interaction in Standard Setting," Discussion Paper 2016-010, Tilburg University, Tilburg Law and Economic Center.
    3. Eric Schmidbauer, 2016. "Multi-period competitive cheap talk with very biased experts," Working Papers 2016-04, University of Central Florida, Department of Economics.

    More about this item

    Keywords

    bargaining; compromise; conflict; consensus; deadlines; free-riding;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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