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Delays and Partial Agreements in Multi-Issue Bargaining

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  • Avidit Acharya

    (Princeton University)

  • Juan Matias Ortner

    (Princeton University)

Abstract

We model a situation in which two players bargain over two issues (pies), one of which can only be resolved at a future date. We find that if the players value the issues asymmetrically (one player considers the existing issue more important than the future one, while the other player has the opposite valuation) then they may delay agreement on the first issue until the second one is finally on the table. If we allow for partial agreements, then the players never leave an issue completely unresolved. They either make a partial agreement on the first issue, and wait for the second one to emerge before completing the agreement; or they come to complete agreements on each of the issues at their earliest possible dates. We discuss applications to legislative bargaining and international trade negotiations.

Suggested Citation

  • Avidit Acharya & Juan Matias Ortner, 2010. "Delays and Partial Agreements in Multi-Issue Bargaining," Working Papers 1263, Princeton University, Department of Economics, Econometric Research Program..
  • Handle: RePEc:pri:metric:wp004.pdf
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    References listed on IDEAS

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    Cited by:

    1. Avidit Acharya & Juan Ortner, 2017. "Policy Reform," Boston University - Department of Economics - Working Papers Series WP2017-007, Boston University - Department of Economics.
    2. Bond, Eric W. & Samuelson, Larry, 2019. "Bargaining with private information and the option of a compulsory license," Games and Economic Behavior, Elsevier, vol. 114(C), pages 83-100.
    3. Ortner, Juan, 2017. "A theory of political gridlock," Theoretical Economics, Econometric Society, vol. 12(2), May.
    4. Francesca Flamini, 2020. "Divide and Invest: Bargaining in a Dynamic Framework," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 37(1), pages 121-153, November.

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    More about this item

    Keywords

    bargaining; multiple issues; delay; hold-up; inefficiency;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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