Political Brinkmanship and Compromise

Helios Herrera, Antonin Macé () and Matias Nuñez
Additional contact information
Helios Herrera: University of Warwick [Coventry], CEPR - Center for Economic Policy Research
Antonin Macé: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris

PSE-Ecole d'économie de Paris (Postprint) from HAL

Abstract: We study how do‐or‐die threats ending negotiations affect gridlock and welfare when two opposing parties bargain. Failure to agree on a deal in any period implies a continuation of the negotiation. However, under brinkmanship, agreement failure in any period may precipitate a crisis with a small chance. In equilibrium, such brinkmanship threats improve the probability of an agreement, but also increase the risk of crisis. Brinkmanship reduces welfare when one might think it is most needed: severe gridlock. In this case, despite this global welfare loss, a party has incentives to use brinkmanship strategically to obtain a favorable bargaining position.

Date: 2025
References: Add references at CitEc
Citations:

Published in International Economic Review, inPress, ⟨10.1111/iere.12760⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Political Brinkmanship and Compromise (2025)
Working Paper: Political Brinkmanship and Compromise (2025)
Working Paper: Political Brinkmanship and Compromise (2025)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:halshs-05163106

DOI: 10.1111/iere.12760

Access Statistics for this paper

More papers in PSE-Ecole d'économie de Paris (Postprint) from HAL
Bibliographic data for series maintained by Caroline Bauer ().