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Some Unpleasant Bargaining Arithmetic?

Author

Listed:
  • Eraslan, Hulya

    (Rice University)

  • Merlo, Antonio

    (Rice University)

Abstract
It is commonly believed that, since unanimity rule safeguards the rights of each individual, it protects minorities from the possibility of expropriation, thus yielding more equitable outcomes than majority rule. We show that this is not necessarily the case in bargaining environments. We study a multilateral bargaining model a la Baron and Ferejohn (1989), where players are heterogeneous with respect to the potential surplus they bring to the bargaining table. We show that unanimity rule may generate equilibrium outcomes that are more unequal (or less equitable) than under majority rule. In fact, as players become perfectly patient, we show that the more inclusive the voting rule, the less equitable the equilibrium allocations.

Suggested Citation

  • Eraslan, Hulya & Merlo, Antonio, 2014. "Some Unpleasant Bargaining Arithmetic?," Working Papers 14-001, Rice University, Department of Economics.
    • Handle: RePEc:ecl:riceco:14-001
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    References listed on IDEAS

    as
    1. Baron, David P. & Ferejohn, John A., 1989. "Bargaining in Legislatures," American Political Science Review, Cambridge University Press, vol. 83(4), pages 1181-1206, December.
    2. Merlo, Antonio & Wilson, Charles A, 1995. "A Stochastic Model of Sequential Bargaining with Complete Information," Econometrica, Econometric Society, vol. 63(2), pages 371-399, March.
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    5. Huseyin Yildirim, 2010. "Distribution of Surplus in Sequential Bargaining with Endogenous Recognition," Working Papers 10-17, Duke University, Department of Economics.
    6. Eraslan, Hülya & McLennan, Andrew, 2013. "Uniqueness of stationary equilibrium payoffs in coalitional bargaining," Journal of Economic Theory, Elsevier, vol. 148(6), pages 2195-2222.
    7. Winter, Eyal, 1996. "Voting and Vetoing," American Political Science Review, Cambridge University Press, vol. 90(4), pages 813-823, December.
    8. Baron David & Kalai Ehud, 1993. "The Simplest Equilibrium of a Majority-Rule Division Game," Journal of Economic Theory, Elsevier, vol. 61(2), pages 290-301, December.
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    Cited by:

    1. Evdokimov, Kirill S., 2023. "Equality in legislative bargaining," Journal of Economic Theory, Elsevier, vol. 212(C).
    2. Miettinen, Topi & Vanberg, Christoph, 2020. "Commitment and Conflict in Multilateral Bargaining," Working Papers 0679, University of Heidelberg, Department of Economics.
    3. Kawamori, Tomohiko, 2022. "Coalition-then-allocation legislative bargaining," Journal of Mathematical Economics, Elsevier, vol. 99(C).
    4. Agustín Casas & Martín Gonzalez-Eiras, 2021. "Cooperation and Retaliation in Legislative Bargaining," Working Papers 95, Red Nacional de Investigadores en Economía (RedNIE).
    5. Li, Shuwen & Houser, Daniel, 2022. "Stochastic bargaining in the lab," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 687-715.

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    More about this item

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

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