Personal Power Dynamics in Bargaining

T. Renee Bowen, Ilwoo Hwang and Stefan Krasa

No 27981, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study bargaining between a fixed agenda-setter and responder over successive issues. If the responder rejects the setter’s proposal, the setter can attempt to assert her will to implement her ideal and will succeed with a probability that depends on her “personal power”. Players learn about the setter’s power as gridlock persists. Gridlock occurs when the setter’s perceived power is either too high or too low, and the players reach compromise when the setter has moderate personal power. The presence of “difficult” issues can induce more compromise as the players have incentives to avoid testing the setter’s power.

JEL-codes: C78 D72 D74 D83 (search for similar items in EconPapers)
Date: 2020-10
New Economics Papers: this item is included in nep-gth, nep-mic and nep-pol
Note: POL
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Published as Renee Bowen & Ilwoo Hwang & Stefan Krasa, 2022. "Personal Power Dynamics in Bargaining," Journal of Economic Theory, .

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