Efficiency and surplus distribution in majoritarian reputational bargaining

Zizhen Ma

Journal of Economic Theory, 2023, vol. 210, issue C

Abstract: This paper studies majoritarian reputational bargaining. Three agents bargain over the division of one dollar under majority rule, and proposers are randomly chosen. Each agent has private information about whether she is a rational type that maximizes her expected share of the dollar or an obstinate type that commits to claiming a certain share of the dollar. Efficiency and surplus distribution in majoritarian reputational bargaining may differ from their counterparts in bilateral reputational bargaining. In a particular equilibrium of our majoritarian game, efficiency loss vanishes asymptotically as the agents become patient, and bargaining ends immediately if all agents are rational. Moreover, the agent who has the lowest positive ex ante probability of being obstinate achieves the highest ex ante payoff, when such probabilities for all agents are sufficiently low.

Keywords: Reputational bargaining; Legislative bargaining (search for similar items in EconPapers)
JEL-codes: C73 C78 D72 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:210:y:2023:i:c:s0022053123000455

DOI: 10.1016/j.jet.2023.105649

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