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Delegation of Bargaining and Power

Author

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  • Segendorff, Björn

    (Dept. of Economics, Stockholm School of Economics)

Abstract

Two principals simultaneously appoint one agent each and decide how much power to give to their agents. The agents' task is to bargain over the provision of a public good. Power here means the right to decide the own side's provision if negotiations break down. In equilibrium the principals delegate to agents that are relatively disinterested in the public good and give them all power. The fact that both principals have the possibility to delegate is, in equilibrium, harmful to at least one of them. The equilibrium may even be Pareto dominated by the outcome under autarchy.

Suggested Citation

  • Segendorff, Björn, 1998. "Delegation of Bargaining and Power," SSE/EFI Working Paper Series in Economics and Finance 248, Stockholm School of Economics.
    • Handle: RePEc:hhs:hastef:0248
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    Cited by:

    1. Robert Dur & Hein Roelfsema, 2005. "Why does centralisation fail to internalise policy externalities?," Public Choice, Springer, vol. 122(3), pages 395-416, March.

    More about this item

    Keywords

    Strategic delegation; bargaining; disagreement; power.;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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