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A sequential bargaining protocol for land rental arrangements

Alfredo Valencia-Toledo and Juan Vidal-Puga

MPRA Paper from University Library of Munich, Germany

Abstract: We consider land rental between a single tenant and several lessors. The tenant should negotiate sequentially with each lessor for the available land. In each stage, we apply the Nash bargaining solution. Our results imply that, when all land is necessary, a fixed price per unit is more favourable for the tenant than a lessor-dependent price. Furthermore, a lessor is better off with a lessor-dependent price only when negotiating first. For the tenant, lessors' merging is relevant with lessor-dependent price but not with fixed price.

Keywords: Bargaining; non-cooperative game; Nash solution; land rental (search for similar items in EconPapers)
JEL-codes: C7 C72 C78 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth
Date: 2017-07-25
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