 Some Unpleasant Bargaining Arithmetics?Antonio Merlo and Hülya Eraslan No 279, 2009 Meeting Papers from Society for Economic Dynamics Abstract: t is commonly believed that, contrary to majority rule, unanimity rule safeguards the rights of each individual, and hence protects minorities from the possibility of expropriation. We show that this is not necessarily the case in bargaining environments. We study a multilateral bargaining model where players have access to different technologies for the production of a "cake." Which cake is produced and how it is allocated are determined collectively through voting. We show that it is possible for unanimity rule to generate equilibrium outcomes that are more unequal (or less equitable) than equilibrium outcomes under majority rule. In fact, there exist conditions under which in the unique equilibrium under unanimity rule only one player receives a positive expected payoff, while the expected payoff of all players in the unique equilibrium under majority rule is positive. We explore the general trade-offs between equity and efficiency for a class of bargaining games, and establish a number of results that pertain to the issue of inequality of equilibrium allocations across different voting rules. Date: 2009 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:red:sed009:279 Access Statistics for this paper More papers in 2009 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC. |
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