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The Game of Negotiations: Ordering Issues and Implementing Agreements

Author

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  • Lutz-Alexander Busch

    (Department of Economics, University of Waterloo)

  • Ignatius J. Horstmann

    (Department of Economics, University of Western Ontario)

Abstract

In this paper, we study a two issue bargaining situation allowing for an endogenous determination of the agenda under alternative rules for implementing agreements. We uncover the settings in which different agenda structures will be employed in equilibrium, how the order in which issues are bargained over matters, and what impact the rules for implementing agreements have. We find that, if agreements are implemented as they are reached, "easy" issues are negotiated first and "hard" issues later; if agreements are implemented only after all issues are settled, then it is only the size of the surplus that determines order, with large issues settled first. We also show that all parties prefer the former rules of implementation to the letter.

Suggested Citation

  • Lutz-Alexander Busch & Ignatius J. Horstmann, 1997. "The Game of Negotiations: Ordering Issues and Implementing Agreements," Working Papers 97003, University of Waterloo, Department of Economics, revised May 1997.
  • Handle: RePEc:wat:wpaper:97003
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    Cited by:

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    6. Oleksandr Zhylyevskyy, 2012. "Spousal Conflict and Divorce," Journal of Labor Economics, University of Chicago Press, vol. 30(4), pages 915-962.
    7. Louta, Malamati & Roussaki, Ioanna & Pechlivanos, Lambros, 2008. "An intelligent agent negotiation strategy in the electronic marketplace environment," European Journal of Operational Research, Elsevier, vol. 187(3), pages 1327-1345, June.

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