Proposal power and majority rule in multilateral bargaining with costly recognition


Journal Article

This paper studies a sequential bargaining model in which agents expend efforts to be the proposer. In equilibrium, agents' effort choices are influenced by the prize and cost effects. The (endogenous) prize is the difference between the residual surplus an agent obtains when he is the proposer and the payment he expects to receive when he is not. Main results include: (1) under the unanimity voting rule, two agents with equal marginal costs propose with equal probabilities, regardless of their time preferences; (2) under a nonunanimity rule, however, the more patient agent proposes with a greater probability; (3) while, under the unanimity rule, the social cost decreases in group heterogeneity, it can increase under a nonunanimity rule; and (4) when agents are identical, the unanimity rule is socially optimal. © 2006 Elsevier Inc. All rights reserved.

Full Text

Duke Authors

Cited Authors

  • Yildirim, H

Published Date

  • September 1, 2007

Published In

Volume / Issue

  • 136 / 1

Start / End Page

  • 167 - 196

Electronic International Standard Serial Number (EISSN)

  • 1095-7235

International Standard Serial Number (ISSN)

  • 0022-0531

Digital Object Identifier (DOI)

  • 10.1016/j.jet.2006.07.008

Citation Source

  • Scopus