Some Unpleasant Bargaining Arithmetic?

Hülya Eraslan and Antonio Merlo

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

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 à 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.

Keywords: Multilateral bargaining; voting rules; inequality (search for similar items in EconPapers)
JEL-codes: C78 D70 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2014-01-03
New Economics Papers: this item is included in nep-cdm, nep-gth 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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Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:14-003

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