Personal power dynamics in bargaining

Renee Bowen, Ilwoo Hwang, Stefan Krasa

Research output: Contribution to journalArticlepeer-review

Abstract

We study bargaining between a fixed agenda-setter and responder over successive issues. If the responder rejects the setter's proposal, the setter can attempt to assert her will to implement her ideal and will succeed with a probability that depends on her “personal power”. Players learn about the setter's power as gridlock persists. Gridlock occurs when the setter's perceived power is either too high or too low, and the players reach compromise when the setter has moderate personal power. The presence of “difficult” issues can induce more compromise as the players have incentives to avoid testing the setter's power.

Original languageEnglish (US)
Article number105530
JournalJournal of Economic Theory
Volume205
DOIs
StatePublished - Oct 2022

Keywords

  • Bargaining
  • Gridlock
  • Learning
  • Personal power

ASJC Scopus subject areas

  • Economics and Econometrics

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