Title

Delays and Partial Agreements in Multi-Issue Bargaining

Author(s)

Avidit Acharya Avidit Acharya (Princeton University)

Juan Matias Ortner Juan Matias Ortner (Princeton University)

Abstract

We model a situation in which two players bargain over two issues (pies), one of which can only be resolved at a future date. We find that if the players value the issues asymmetrically (one player considers the existing issue more important than the future one, while the other player has the opposite valuation) then they may delay agreement on the first issue until the second one is finally on the table. If we allow for partial agreements, then the players never leave an issue completely unresolved. They either make a partial agreement on the first issue, and wait for the second one to emerge before completing the agreement; or they come to complete agreements on each of the issues at their earliest possible dates. We discuss applications to legislative bargaining and international trade negotiations.

Creation Date

2010-08

Section URL ID

ET

Paper Number

wp004.pdf

URL

http://stanford.edu/~avidit/bargaining.pdf

File Function

Jel

C73, C78

Keyword(s)

bargaining, multiple issues, delay, hold-up, inefficiency

Suppress

false

Series

10