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A Noncooperative Model of Collective Decision Making: A Multilateral Bargaining Approach

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  • Rausser, Gordon C.
  • Simon, Leo K.

Abstract

This paper extends the Stahl-Rubinstein model of bilateral bargaining to incorporate many players and multidimensional issue spaces. A central feature of our framework is that in each round of negotiations, a proposer is selected randomly. Our bargaining model consists of a sequence of finite-horizon games, in which the horizon increases without bound. A solution to our model is a limit of equilibrium outcomes for the finite horizon games. A necessary condition for existence of a deterministic solution is that the limit outcome belongs to the core of the underlying bargaining problem. Solutions, if they exist, are generically unique. Two sets of sufficiency conditions for existence are presented. The paper concludes with examples and applications. In particular, we consider bipolar negotiations between two factions, and show that there is a positive relationship between the cohesiveness of one faction relative to the other and its effectiveness in securing the common goals to its members.

Suggested Citation

  • Rausser, Gordon C. & Simon, Leo K., 1992. "A Noncooperative Model of Collective Decision Making: A Multilateral Bargaining Approach," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt1p67k0dp, Department of Agricultural & Resource Economics, UC Berkeley.
    • Handle: RePEc:cdl:agrebk:qt1p67k0dp
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    1. Simon, Leo K. & Thoyer, Sophie & Morardet, Sylvie & Goodhue, Rachael E. & Rio, Patrick & Rausser, Gordon C., 2003. "Structure and bargaining power in multilateral negotiations: Application to water management policies in France," 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia 58258, Australian Agricultural and Resource Economics Society.
    2. Carlo Carraro & Carmen Marchiori & Alessandra Sgobbi, 2005. "Applications of Negotiation Theory to Water Issues," Working Papers 2005.65, Fondazione Eni Enrico Mattei.
    3. Harold Houba, 2008. "Computing Alternating Offers And Water Prices In Bilateral River Basin Management," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 10(03), pages 257-278.
    4. Nicolas Quérou & Patrick Rio & Mabel Tidball, 2007. "Multi-Party Negotiation When Agents Have Subjective Estimates of Bargaining Powers," Group Decision and Negotiation, Springer, vol. 16(5), pages 417-436, September.
    5. Adams, Gregory & Rausser, Gordon & Simon, Leo, 1996. "Modelling multilateral negotiations: An application to California water policy," Journal of Economic Behavior & Organization, Elsevier, vol. 30(1), pages 97-111, July.
    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. Sgobbi, Alessandra & Carraro, Carlo, 2011. "A Stochastic Multiple Players Multi-Issues Bargaining Model for the Piave River Basin," Strategic Behavior and the Environment, now publishers, vol. 1(2), pages 119-150, April.
    8. Horowitz, John K. & Just, Richard E., 1995. "Political coalition breaking and sustainability of policy reform," Journal of Development Economics, Elsevier, vol. 47(2), pages 271-286, August.
    9. Alejandro Caparrós, 2016. "Bargaining and International Environmental Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(1), pages 5-31, September.
    10. Carraro, Carlo & Sgobbi, Alessandra, 2007. "Modelling Negotiated Decision Making: A Multilateral, Multiple Issues, Non-Cooperative Bargaining Model with Uncertainty," CEPR Discussion Papers 6424, C.E.P.R. Discussion Papers.
    11. Tyagi, Ashish & Shortle, James S., 2016. "Modeling Endogenous Change in Water Allocation Mechanisms: A Non-Cooperative Bargaining Approach," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235571, Agricultural and Applied Economics Association.

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