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Alliances and Negotiations

Author

Listed:
  • Paola MAnzini

    (Queen Mary, University of LOndon and IZA)

  • Marco Mariotti

    (University of Exeter)

Abstract

A characteristic of many bargaining situations is that the negotiators represents the interests of a set of parties (trade unions, political parties, etc.) with composite interests, whose bargaining behaviour is regulated by some collective decision mechanism. In this paper we provide a natural model of such circumstances, and show how different preference aggregation procedures within the composite player affect the bargaining outcome. In particular we find that unanimity procedures lead to 'more aggressive' behaviour than majority procedures, and that procedures which introduce minimum safeguards for the members of an alliance may result in agreements that are worse than without those safeguards.

Suggested Citation

  • Paola MAnzini & Marco Mariotti, 2000. "Alliances and Negotiations," Game Theory and Information 0004007, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpga:0004007
    Note: Type of Document - SWorkplace 2.5; prepared on IBM PC ; to print on HP; pages: 27 ; figures: included
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    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. Muthoo,Abhinay, 1999. "Bargaining Theory with Applications," Cambridge Books, Cambridge University Press, number 9780521576475, December.
    3. Ponsati, Clara & Sakovics, Jozsef, 1996. "Multiperson Bargaining over Two Alternatives," Games and Economic Behavior, Elsevier, vol. 12(2), pages 226-244, February.
    4. Binmore, Ken & Osborne, Martin J. & Rubinstein, Ariel, 1992. "Noncooperative models of bargaining," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 7, pages 179-225, Elsevier.
    5. Martin J. Osborne & Ariel Rubinstein, 2005. "Bargaining and Markets," Levine's Bibliography 666156000000000515, UCLA Department of Economics.
    6. Manzini, Paola & Mariotti, Marco, 2002. "The Effect of Disagreement on Noncooperative Bargaining," Journal of Economic Theory, Elsevier, vol. 107(2), pages 490-499, December.
    7. 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.
    8. Shaked, Avner & Sutton, John, 1984. "Involuntary Unemployment as a Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 52(6), pages 1351-1364, November.
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    Cited by:

    1. Paola Manzini & Marco Mariotti, 2009. "Alliances and negotiations: an incomplete information example," Review of Economic Design, Springer;Society for Economic Design, vol. 13(3), pages 195-203, September.
    2. Vincent Martinet & Pedro Gajardo & Michel De Lara & Héctor Ramírez Cabrera, 2011. "Bargaining with intertemporal maximin payoffs," EconomiX Working Papers 2011-7, University of Paris Nanterre, EconomiX.
    3. Philip Bond & Hülya Eraslan, 2010. "Strategic Voting over Strategic Proposals," Review of Economic Studies, Oxford University Press, vol. 77(2), pages 459-490.
    4. Alexander Elbittar & Andrei Gomberg, 2012. ""My friends: it would be an error to accept": Communication and group identity in a bargaining setting," Working Papers 1203, Centro de Investigacion Economica, ITAM.
    5. Elbittar Alexander & Gomberg Andrei & Sour Laura, 2011. "Group Decision-Making and Voting in Ultimatum Bargaining: An Experimental Study," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-33, August.
    6. Suchan Chae & Paul Heidhues, 2001. "Nash Bargaining Solution with Coalitions and The Joint Bargaining Paradox," CIG Working Papers FS IV 01-15, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    7. Konrad, Kai A. & Cusack, Thomas R., 2013. "Hanging together or being hung separately: The strategic power of coalitions where bargaining occurs with incomplete information," Discussion Papers, Research Unit: Market Behavior SP II 2013-202, WZB Berlin Social Science Center.
    8. Philip Bond & Hülya Eraslan, 2004. "Strategic Voting over Strategic Proposals, Second Version," PIER Working Paper Archive 07-014, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 02 Jan 2007.
    9. Carraro, Carlo & Sgobbi, Alessandra, 2007. "Modelling Negotiated Decision Making: A Multilateral, Multiple Issues, Non-Cooperative Bargaining Model with Uncertainty," CEPR Discussion Papers 6424, C.E.P.R. Discussion Papers.
    10. Daniel Cardona & Clara Ponsatí, 2015. "Representing a democratic constituency in negotiations: delegation versus ratification," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 45(2), pages 399-414, September.
    11. Vincent Martinet & Pedro Gajardo & Michel De Lara & Héctor Ramírez Cabrera, 2011. "Bargaining with intertemporal maximin payoffs," EconomiX Working Papers 2011-7, University of Paris Nanterre, EconomiX.

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    More about this item

    Keywords

    Alliances; multiperson bargaining;

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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