IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_1668.html
   My bibliography  Save this paper

Voice and Bargaining Power

Author

Listed:
  • Hans Gersbach
  • Hans Haller

Abstract

We propose a formal concept of the power of voice in the context of a simple model where individuals form groups and trade in competitive markets. Individuals use outside options in two different ways. Actual outside options reflect the possibility to exit or to join other existing groups. Hypothetical outside options refer to hypothetical groups that are ultimately not formed. Articulation of hypothetical outside options in the bargaining process determines the relative bargaining power of the members of a group, which constitutes an instance of the power of voice. The adopted equilibrium concept endogenizes the outside options as well as the power of voice. In our illustrative example, there exists an equilibrium that uniquely determines the power of voice and the allocation of commodities.

Suggested Citation

  • Hans Gersbach & Hans Haller, 2006. "Voice and Bargaining Power," CESifo Working Paper Series 1668, CESifo.
    • Handle: RePEc:ces:ceswps:_1668
    as

    Download full text from publisher

    File URL: https://www.cesifo.org/DocDL/cesifo1_wp1668.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Chwe Michael Suk-Young, 1994. "Farsighted Coalitional Stability," Journal of Economic Theory, Elsevier, vol. 63(2), pages 299-325, August.
    2. Papai, Szilvia, 2004. "Unique stability in simple coalition formation games," Games and Economic Behavior, Elsevier, vol. 48(2), pages 337-354, August.
    3. Kalyan Chatterjee & Bhaskar Dutia & Debraj Ray & Kunal Sengupta, 2013. "A Noncooperative Theory of Coalitional Bargaining," World Scientific Book Chapters, in: Bargaining in the Shadow of the Market Selected Papers on Bilateral and Multilateral Bargaining, chapter 5, pages 97-111, World Scientific Publishing Co. Pte. Ltd..
    4. Rochford, Sharon C., 1984. "Symmetrically pairwise-bargained allocations in an assignment market," Journal of Economic Theory, Elsevier, vol. 34(2), pages 262-281, December.
    5. Effrosyni Diamantoudi & Licun Xue, 2003. "Farsighted stability in hedonic games," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 21(1), pages 39-61, August.
    6. Bogomolnaia, Anna & Jackson, Matthew O., 2002. "The Stability of Hedonic Coalition Structures," Games and Economic Behavior, Elsevier, vol. 38(2), pages 201-230, February.
    7. Tayfun Sönmez & Suryapratim Banerjee & Hideo Konishi, 2001. "Core in a simple coalition formation game," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 18(1), pages 135-153.
    8. Bennett, E. & van Damme, E.E.C., 1990. "Demand commitment bargaining : The case of apex games," Other publications TiSEM ef13c9a9-3db6-4939-96ef-5, Tilburg University, School of Economics and Management.
    9. Kalai, Ehud & Samet, Dov, 1985. "Monotonic Solutions to General Cooperative Games," Econometrica, Econometric Society, vol. 53(2), pages 307-327, March.
    10. Barbera, Salvador & Gerber, Anke, 2003. "Corrigendum to "On coalition formation: durable coalition structures": [Mathematical Social Sciences 45 (2003) 185-203]," Mathematical Social Sciences, Elsevier, vol. 46(3), pages 355-356, December.
    11. Hans Gersbach & Hans Haller, 2001. "Collective Decisions and Competitive Markets," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(2), pages 347-368.
    12. José Alcalde & Pablo Revilla, 2001. "Tops Responsiveness, Strategy-Proofness And Coalition Formation Problems," Working Papers. Serie AD 2001-11, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    13. Becker, Gary S, 1993. "Nobel Lecture: The Economic Way of Looking at Behavior," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 385-409, June.
    14. Bell, Clive, 1991. "Markets, power and productivity in rural Asia : A review article," Journal of Development Economics, Elsevier, vol. 36(2), pages 373-393, October.
    15. John C. Harsanyi, 1974. "An Equilibrium-Point Interpretation of Stable Sets and a Proposed Alternative Definition," Management Science, INFORMS, vol. 20(11), pages 1472-1495, July.
    16. Bennett, Elaine, 1997. "Multilateral Bargaining Problems," Games and Economic Behavior, Elsevier, vol. 19(2), pages 151-179, May.
    17. Bennett, Elaine, 1988. "Consistent bargaining conjectures in marriage and matching," Journal of Economic Theory, Elsevier, vol. 45(2), pages 392-407, August.
    18. Hans Gersbach & Hans Haller, 2002. "Competitive Markets, Collective Decisions and Group Formation," Discussion Papers 02-11, University of Copenhagen. Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hans Gersbach & Hans Haller, 2011. "Bargaining cum voice," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 36(2), pages 199-225, February.
    2. Vartiainen, Hannu, 2011. "Dynamic coalitional equilibrium," Journal of Economic Theory, Elsevier, vol. 146(2), pages 672-698, March.
    3. Gersbach, Hans & Haller, Hans, 2011. "Groups, collective decisions and markets," Journal of Economic Theory, Elsevier, vol. 146(1), pages 275-299, January.
    4. Ray, Debraj & Vohra, Rajiv, 2015. "Coalition Formation," Handbook of Game Theory with Economic Applications,, Elsevier.
    5. Hans Gersbach & Hans Haller, 2002. "Competitive Markets, Collective Decisions and Group Formation," Discussion Papers 02-11, University of Copenhagen. Department of Economics.
    6. Han, Lining & Juarez, Ruben & Vargas, Miguel, 2023. "Robust equilibria in tournaments," Games and Economic Behavior, Elsevier, vol. 142(C), pages 423-439.
    7. Barbera, Salvador & Gerber, Anke, 2003. "On coalition formation: durable coalition structures," Mathematical Social Sciences, Elsevier, vol. 45(2), pages 185-203, April.
    8. Debraj Ray & Rajiv Vohra, 2015. "The Farsighted Stable Set," Econometrica, Econometric Society, vol. 83(3), pages 977-1011, May.
    9. Francis Bloch & Effrosyni Diamantoudi, 2011. "Noncooperative formation of coalitions in hedonic games," International Journal of Game Theory, Springer;Game Theory Society, vol. 40(2), pages 263-280, May.
    10. Gersbach, Hans & Haller, Hans, 2019. "Households, markets and public choice," Mathematical Social Sciences, Elsevier, vol. 100(C), pages 16-28.
    11. Iehle, Vincent, 2007. "The core-partition of a hedonic game," Mathematical Social Sciences, Elsevier, vol. 54(2), pages 176-185, September.
    12. Diamantoudi, Effrosyni & Xue, Licun, 2007. "Coalitions, agreements and efficiency," Journal of Economic Theory, Elsevier, vol. 136(1), pages 105-125, September.
    13. Bloch, Francis & van den Nouweland, Anne, 2020. "Farsighted stability with heterogeneous expectations," Games and Economic Behavior, Elsevier, vol. 121(C), pages 32-54.
    14. Hans Gersbach & Hans Haller, 2008. "Exit and Power in General Equilibrium," CESifo Working Paper Series 2369, CESifo.
    15. Dominik Karos, 2015. "Stable partitions for games with non-transferable utilities and externalities," Economics Series Working Papers 741, University of Oxford, Department of Economics.
    16. Takaaki Abe, 2018. "Stable coalition structures in symmetric majority games: a coincidence between myopia and farsightedness," Theory and Decision, Springer, vol. 85(3), pages 353-374, October.
    17. Barbera, Salvador & Gerber, Anke, 2007. "A note on the impossibility of a satisfactory concept of stability for coalition formation games," Economics Letters, Elsevier, vol. 95(1), pages 85-90, April.
    18. Alison Watts, 2006. "Formation of Segregated and Integrated Groups," Working Papers 2006.127, Fondazione Eni Enrico Mattei.
    19. Demange, Gabrielle, 2009. "The strategy structure of some coalition formation games," Games and Economic Behavior, Elsevier, vol. 65(1), pages 83-104, January.
    20. Konishi, Hideo & Ray, Debraj, 2003. "Coalition formation as a dynamic process," Journal of Economic Theory, Elsevier, vol. 110(1), pages 1-41, May.

    More about this item

    Keywords

    Power of Voice; competitive equilibria; group formation; bargaining; articulation of outside options;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_1668. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.