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The Politics of Bargaining as a Group

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Listed:
  • Vincent Anesi
  • Peter Buisseret

Abstract

We develop a dynamic model in which a group collectively bargains with an external party. At each date the group makes an offer to the external party (the ‘agent’) in exchange for a concession. Group members hold heterogeneous preferences over agreements and are uncertain about the agent’s resolve. We show that all group members favor more aggressive proposals than they would if they were negotiating alone. By eliciting more information about the agent’s resolve, these offers reduce the group members’ uncertainty about the agent’s preferences and therefore reduce the group’s internal conflicts over its negotiating strategy. To mitigate the consequent risk that negotiations fail, decisive group members successively give up their influence over proposals: starting from any initially democratic decision process, the group eventually consolidates its entire negotiation authority into the hands of a single member.

Suggested Citation

  • Vincent Anesi & Peter Buisseret, 2023. "The Politics of Bargaining as a Group," CESifo Working Paper Series 10823, CESifo.
  • Handle: RePEc:ces:ceswps:_10823
    as

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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp10823.pdf
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    References listed on IDEAS

    as
    1. Wouter Dessein, 2002. "Authority and Communication in Organizations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(4), pages 811-838.
    2. Elbittar Alexander & Gomberg Andrei & Sour Laura, 2011. "Group Decision-Making and Voting in Ultimatum Bargaining: An Experimental Study," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-33, August.
    3. Manzini, Paola & Mariotti, Marco, 2005. "Alliances and negotiations," Journal of Economic Theory, Elsevier, vol. 121(1), pages 128-141, March.
    4. Vincent Anesi & T. Renee Bowen, 2021. "Policy Experimentation in Committees: A Case against Veto Rights under Redistributive Constraints," American Economic Journal: Microeconomics, American Economic Association, vol. 13(3), pages 124-162, August.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    adverse selection; collective choice; political economy; dictatorship; bargaining;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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