Proposal power and majority rule in multilateral bargaining with costly recognition
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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.
Published Version (Please cite this version)10.1016/j.jet.2006.07.008
Publication InfoYildirim, H (2007). Proposal power and majority rule in multilateral bargaining with costly recognition. Journal of Economic Theory, 136(1). pp. 167-196. 10.1016/j.jet.2006.07.008. Retrieved from https://hdl.handle.net/10161/1936.
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Professor of Economics
Professor Yildirim's recent research concerns charitable giving, sequencing of bilateral negotiations, and the value of (non-)blind review. His papers have appeared in top economics journals such as American Economic Review, Review of Economic Studies, Journal of Economic Theory, and RAND journal of Economics.