Strategic bargaining with destructive power

Paola Manzini

Game Theory and Information from University Library of Munich, Germany

Abstract: This paper studies a two-player alternating offers bargaining model in which one of the agents has the ability to damage permanently the ``pie'' bargained over. I show how this feature can result in an increase of the cost of rejecting an offer for the ``non-harming player''. Beside the ``Rubinstenian'' bilateral monopoly outcome, I show that it is possible to select a ``harming'' equilibrium in which the sequence of damages to the pie is endogenously determined and payoffs do not vary monotonically with the discount factor.

Keywords: bargaining; commitment; destructive power (search for similar items in EconPapers)
JEL-codes: C78 (search for similar items in EconPapers)
Pages: 21 pages
Date: 1996-12-05
New Economics Papers: this item is included in nep-gth and nep-mic
Note: Type of Document - postscript; prepared on IBM PC ; to print on PostScript; pages: 21 ; figures: included. postcript via TrueTex Previewer
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Strategic bargaining with destructive power (1999)
Working Paper: Strategic bargaining with destructive power (1996)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpga:9612002

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