Bargaining and Rent Seeking

Haruo Imai and Hannu Salonen

No 80, Discussion Papers from Aboa Centre for Economics

Abstract: We study a Baron-Ferejohn (1989) type of bargaining model to which we append an investment stage. As long as no agreement is reached, a new proposer is selected randomly from the player set. A proposal is accepted if at least q players accept it. Prior to the bargaining stage, players may make investments to increase their recognition probabili- ties in the bargaining game. The investment stage is modeled in the standard way, first suggested by Tullock (1980). When investment costs are the same for all players, no symmetric stationary subgame perfect equilibria in pure investment strategies may exist if unanimity is not needed to reach an agreement. An asymmetric pure stationary equi- librium in a symmetric three-person game exists however when the discount factor is sufficiently high. An equilibrium with symmetric mixed investment strategies exists although payoff functions are not everywhere continuous with respect to investments.

Keywords: bargaining; rent seeking; subgame perfection (search for similar items in EconPapers)
JEL-codes: C72 C78 D70 (search for similar items in EconPapers)
Pages: 22
Date: 2012-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.ace-economics.fi/kuvat/dp80.pdf (application/pdf)

Related works:
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:tkk:dpaper:dp80

Access Statistics for this paper

More papers in Discussion Papers from Aboa Centre for Economics Contact information at EDIRC.
Bibliographic data for series maintained by Susmita Baulia ().