Breakdown in multilateral negotiations

Daniel Göller () and Michael Hewer

Journal of Economic Theory, 2015, vol. 157, issue C, 478-484

Abstract: We analyze a complete information multilateral bargaining model in which a buyer is to purchase two complementary goods from two sellers. Binding cash-offer contracts are used to govern transactions. In contrast to preexisting literature, we do not normalize the parties' reservation utilities to zero. We show that this assumption holds critical importance by demonstrating that a complete breakdown of negotiations may occur as the unique equilibrium outcome, even if only two sellers are present.

Keywords: Multilateral bargaining; Complete information; Breakdown; Coase theorem (search for similar items in EconPapers)
JEL-codes: C78 D23 D62 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:157:y:2015:i:c:p:478-484

DOI: 10.1016/j.jet.2015.01.013

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