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Efficiency and surplus distribution in majoritarian reputational bargaining

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  • Ma, Zizhen

Abstract

This paper studies majoritarian reputational bargaining. Three agents bargain over the division of one dollar under majority rule, and proposers are randomly chosen. Each agent has private information about whether she is a rational type that maximizes her expected share of the dollar or an obstinate type that commits to claiming a certain share of the dollar. Efficiency and surplus distribution in majoritarian reputational bargaining may differ from their counterparts in bilateral reputational bargaining. In a particular equilibrium of our majoritarian game, efficiency loss vanishes asymptotically as the agents become patient, and bargaining ends immediately if all agents are rational. Moreover, the agent who has the lowest positive ex ante probability of being obstinate achieves the highest ex ante payoff, when such probabilities for all agents are sufficiently low.

Suggested Citation

  • Ma, Zizhen, 2023. "Efficiency and surplus distribution in majoritarian reputational bargaining," Journal of Economic Theory, Elsevier, vol. 210(C).
    • Handle: RePEc:eee:jetheo:v:210:y:2023:i:c:s0022053123000455
    DOI: 10.1016/j.jet.2023.105649
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    Cited by:

    1. Piazolo, David & Vanberg, Christoph, 2022. "Legislative bargaining with private information: A comparison of majority and unanimity rule," Working Papers 0708, University of Heidelberg, Department of Economics.
    2. Piazolo, David, 2025. "The "German Vote" and its consequences: (Un)reliable parties in multilateral bargaining under private information," Working Papers 0756, University of Heidelberg, Department of Economics.

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    More about this item

    Keywords

    Reputational bargaining; Legislative bargaining;

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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