Legislative and Multilateral Bargaining

2019 ◽  
Vol 11 (1) ◽  
pp. 443-472 ◽  
Author(s):  
Hülya Eraslan ◽  
Kirill S. Evdokimov
Keyword(s):  
Public Goods ◽  
Bargaining Power ◽  
Risk Preferences ◽  
Cheap Talk ◽  
Multilateral Bargaining ◽  
Legislative Bargaining ◽  
Voting Weights ◽  
Theoretical Literature

This review of the theoretical literature on legislative and multilateral bargaining begins with presentation of the seminal Baron-Ferejohn model. The review then encompasses the extensions to bargaining among asymmetric players in terms of bargaining power, voting weights, and time and risk preferences; spatial bargaining; bargaining over a stochastic surplus; bargaining over public goods; legislative bargaining with alternative bargaining protocols in which players make demands, compete for recognition, or make counterproposals; and legislative bargaining with cheap talk communication.

UNIQUENESS IN RANDOM-PROPOSER MULTILATERAL BARGAINING

2009 ◽  
Vol 11 (04) ◽  
pp. 407-417 ◽  
Author(s):  
HUIBIN YAN
Keyword(s):  
Subgame Perfect Equilibrium ◽  
Characteristic Functions ◽  
Bargaining Model ◽  
Equilibrium Outcome ◽  
Multilateral Bargaining ◽  
Legislative Bargaining ◽  
Uniqueness Results ◽  
Subgame Perfect Equilibria ◽  
Perfect Equilibria ◽  
Special Case

Solution uniqueness is an important property for a bargaining model. Rubinstein's (1982) seminal 2-person alternating-offer bargaining game has a unique Subgame Perfect Equilibrium outcome. Is it possible to obtain uniqueness results in the much enlarged setting of multilateral bargaining with a characteristic function? This paper investigates a random-proposer model first studied in Okada (1993) in which each period players have equal probabilities of being selected to make a proposal and bargaining ends after one coalition forms. Focusing on transferable utility environments and Stationary Subgame Perfect Equilibria (SSPE), we find ex ante SSPE payoff uniqueness for symmetric and convex characteristic functions, considerably expanding the conditions under which this model is known to exhibit SSPE payoff uniqueness. Our model includes as a special case a variant of the legislative bargaining model in Baron and Ferejohn (1989), and our results imply (unrestricted) SSPE payoff uniqueness in this case.

scholarly journals How cheap talk enhances efficiency in threshold public goods games

2017 ◽  
Vol 101 ◽  
pp. 234-259 ◽  
Author(s):  
Thomas Palfrey ◽  
Howard Rosenthal ◽  
Nilanjan Roy
Keyword(s):  
Public Goods ◽  
Cheap Talk ◽  
Public Goods Games ◽  
Threshold Public Goods

Demand Commitment in Legislative Bargaining

2007 ◽  
Vol 101 (4) ◽  
pp. 847-850 ◽  
Author(s):  
MARIA MONTERO ◽  
JUAN J. VIDAL-PUGA
Keyword(s):  
Bargaining Power ◽  
Government Formation ◽  
Legislative Bargaining ◽  
Ex Post ◽  
Ex Ante

Morelli (1999) provides a model of government formation in which the parties make payoff demands and the order of moves is chosen by the leading party. Morelli's main proposition states that the ex post distribution of payoffs inside the coalition that forms is proportional to the distribution of relative ex ante bargaining power. We provide a counterexample in which the leading party is able to obtain the entire payoff; furthermore, there are coalitions for which proportional payoff division does not occur for any order of moves.

Cheap Talk on Freelance Platforms

2021 ◽  
Author(s):  
T. Tony Ke ◽  
Yuting Zhu
Keyword(s):  
Private Information ◽  
Business Strategy ◽  
Bargaining Power ◽  
Cheap Talk ◽  
The Other ◽  
Pricing Strategies ◽  
Information Distortion ◽  
True Type ◽  
Design Perspective ◽  
The Cost

We consider a large decentralized freelance platform where buyers with private information about their quality preferences are matched with freelancers that differ in quality. When posting their job requests, buyers can report their quality preferences via cheap talk, which influences freelancers’ application and pricing strategies. By exaggerating one’s quality preference, a buyer attracts not only more applications from freelancers, but also those with higher quality, at the cost of a higher expected price. We find that it is always an equilibrium for the buyers to report their quality preferences truthfully when they cannot renegotiate with freelancers on their asking prices after getting matched. On the other hand, when postmatch renegotiation is allowed and buyers have relatively high bargaining power, low-type buyers may strategically exaggerate their quality preferences, and subsequently after getting matched, costly signal their true type and bargain for lower prices. From a platform design perspective, our analysis implies that the option of renegotiation, designed to facilitate postmatch information transmission, may backfire by giving rise to buyers’ prematch opportunistic behaviors of information distortion. This paper was accepted by Joshua Gans, business strategy.

Common-Value Public Goods and Informational Social Dilemmas

2021 ◽  
Vol 13 (2) ◽  
pp. 343-369
Author(s):  
Caleb A. Cox ◽  
Brock Stoddard
Keyword(s):  
Public Goods ◽  
Private Information ◽  
Social Dilemmas ◽  
Cheap Talk ◽  
Public Goods Game ◽  
Common Value ◽  
Private Signals ◽  
Information And Communication

We experimentally examine private information and communication in a public goods environment with uncertain returns. We consider a common-value public goods game in which the return to contribution is either high or low. Before contributing, three players observe private signals correlated with the return and send cheap talk messages to one another. There are social gains from truthfulness, but a private incentive to exaggerate. We compare treatments with and without cheap talk, finding that communication is largely truthful and increases efficiency. In further treatments, we increase the incentive to exaggerate and find reduced truthfulness and smaller gains from communication. (JEL C72, D82, D83, H41)

Searching for a Bargain: Power of Strategic Commitment

2015 ◽  
Vol 7 (1) ◽  
pp. 320-353 ◽  
Author(s):  
Selçuk Özyurt
Keyword(s):  
Bargaining Power ◽  
Multilateral Bargaining ◽  
Strategic Commitment ◽  
Monopoly Price ◽  
Reputational Concerns

This paper shows that in a multilateral bargaining setting where the sellers compete á la Bertrand, a range of prices that includes the monopoly price and 0 are compatible with equilibrium, even in the limit where the reputational concerns and frictions vanish. In particular, the incentive of committing to a specific demand, the opportunity of building reputation about inflexibility, and the anxiety of preserving their reputation can tilt players' bargaining power in such a way that being deemed as a tough bargainer is bad for the competing players, and thus, price undercutting is not optimal for the sellers. (JEL C78, D43, D83)

Demand Competition and Policy Compromise in Legislative Bargaining

1999 ◽  
Vol 93 (4) ◽  
pp. 809-820 ◽  
Author(s):  
Massimo Morelli
Keyword(s):  
Bargaining Power ◽  
Winning Coalition ◽  
Bargaining Model ◽  
Policy Outcome ◽  
Bargaining Process ◽  
Legislative Bargaining ◽  
Ex Post ◽  
Head Of State ◽  
Institutional Differences

I propose a new majoritarian bargaining model in which more than one implicit proposal can be on the table at the same time. Institutional differences from system to system affect the order of play, the equilibrium majorities, and the policy outcome. The ex post distribution of payoffs within a winning coalition is, however, invariant to fundamental institutional differences, and it is always proportional to the distribution of relative ex ante bargaining power. The bargaining process is modeled as a sequential demand game, in which players are called to propose a policy and to specify their desired share of the private benefits related to being in office. The order of play is endogenous, and the distribution of payoffs within an equilibrium majority usually does not depend on who is the proposal maker. The role of the head of state and the advantages to center parties are also studied.

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