Some Unpleasant Bargaining Arithmetic?

Hülya Eraslan and Antonio Merlo

Working Papers from Rice University, Department of Economics

Abstract: It is commonly believed that, since unanimity rule safeguards the rights of each individual, it protects minorities from the possibility of expropriation, thus yielding more equitable outcomes than majority rule. We show that this is not necessarily the case in bargaining environments. We study a multilateral bargaining model a la Baron and Ferejohn (1989), where players are heterogeneous with respect to the potential surplus they bring to the bargaining table. We show that unanimity rule may generate equilibrium outcomes that are more unequal (or less equitable) than under majority rule. In fact, as players become perfectly patient, we show that the more inclusive the voting rule, the less equitable the equilibrium allocations.

JEL-codes: C78 D70 (search for similar items in EconPapers)
Date: 2014-08
New Economics Papers: this item is included in nep-cdm, nep-ger and nep-mic
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Related works:
Journal Article: Some unpleasant bargaining arithmetic? (2017)
Working Paper: Some Unpleasant Bargaining Arithmetic? (2014)
Working Paper: Some Unpleasant Bargaining Arithmetics? (2009)
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