The Politics of Bargaining as a Group

Vincent Anesti and Peter Buisseret
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Vincent Anesti: Department of Economics and Management, University of Luxembourg
Peter Buisseret: Department of Government, Harvard University,

CRETA Online Discussion Paper Series from Centre for Research in Economic Theory and its Applications CRETA

Abstract: We develop a dynamic model in which a group collectively bargains with an external party. At each date the group makes an offer to the external party (the ‘agent’) in exchange for a concession. Group members hold heterogeneous preferences over agreements and are uncertain about the agent’s resolve. We show that all group members favor more aggressive proposals than they would if they were negotiating alone. By eliciting more information about the agent’s resolve, these offers reduce the group members’ uncertainty about the agent’s preferences and therefore reduce the group’s internal conflicts over its negotiating strategy. To mitigate the consequent risk that negotiations fail, decisive group members successively give up their influence over proposals: starting from any initially democratic decision process, the group eventually consolidates its entire negotiation authority into the hands of a single member.

Keywords: Adverse selection; collective choice; political economy; dictatorship; bargaining. JEL codes: D02; D71; D78; D82; L22 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-cdm, nep-eur and nep-gth
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