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Uncertainty and bargaining: A structural econometric approach

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  • Klein, Gordon
  • Rebolledo, Mayra

Abstract

This paper proposes a structural econometric model to analyze the influence of uncertain disagreement outcomes on the settlement of new agreements between parties with uneven bargaining power. By including the the findings of theoretical literature on the requirements to reach agreements under uncertain disagreement conditions, and using an asymmetric Nash bargaining framework, our proposal is able to estimate not only the bargaining solutions but also the bargainers' uncertainties and determine whether a new compromise could be reach under such uncertainty or not.

Suggested Citation

  • Klein, Gordon & Rebolledo, Mayra, 2020. "Uncertainty and bargaining: A structural econometric approach," CAWM Discussion Papers 114, University of Münster, Münster Center for Economic Policy (MEP).
    • Handle: RePEc:zbw:cawmdp:114
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    References listed on IDEAS

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    3. van Damme, E.E.C. & Peters, H., 1991. "Characterizing the Nash and Raiffa bargaining solutions by disagreement point axioms," Other publications TiSEM 4bd5eb9e-328a-45a0-aa0a-e, Tilburg University, School of Economics and Management.
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    5. Hans Peters & Eric Van Damme, 1991. "Characterizing the Nash and Raiffa Bargaining Solutions by Disagreement Point Axioms," Mathematics of Operations Research, INFORMS, vol. 16(3), pages 447-461, August.
    6. Fey, Mark & Meirowitz, Adam & Ramsay, Kristopher W., 2013. "Credibility and Commitment in Crisis Bargaining," Political Science Research and Methods, Cambridge University Press, vol. 1(1), pages 27-52, June.
    7. Kate Ho & Robin S. Lee, 2017. "Insurer Competition in Health Care Markets," Econometrica, Econometric Society, vol. 85, pages 379-417, March.
    8. Mark Fey & Kristopher W. Ramsay, 2011. "Uncertainty and Incentives in Crisis Bargaining: Game‐Free Analysis of International Conflict," American Journal of Political Science, John Wiley & Sons, vol. 55(1), pages 149-169, January.
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    11. Allan Collard-Wexler & Gautam Gowrisankaran & Robin S. Lee, 2019. ""Nash-in-Nash" Bargaining: A Microfoundation for Applied Work," Journal of Political Economy, University of Chicago Press, vol. 127(1), pages 163-195.
    12. Cramton, Peter C & Tracy, Joseph S, 1992. "Strikes and Holdouts in Wage Bargaining: Theory and Data," American Economic Review, American Economic Association, vol. 82(1), pages 100-121, March.
    13. Céline Bonnet & Zohra Bouamra-Mechemache, 2016. "Organic Label, Bargaining Power, and Profit-sharing in the French Fluid Milk Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(1), pages 113-133.
    14. Oliver Hart, 1989. "Bargaining and Strikes," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 104(1), pages 25-43.
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    Cited by:

    1. Tang, Xinyin & Feng, Chong & Zhu, Jianping & He, Minna, 2022. "How Can We Learn from Borrowers’ Online Behaviors? The Signal Effect of Borrowers’ Platform Involvement on Their Credit Risk," SocArXiv qga8j, Center for Open Science.
    2. Rebolledo, Mayra, 2020. "M&A, uncertainty, and bargaining power: Evidence from the German retail sector," CAWM Discussion Papers 116, University of Münster, Münster Center for Economic Policy (MEP).
    3. Klein, Gordon & Rebolledo, Mayra, 2020. "Uncertainty, bargaining power and bargaining solutions: An empirical application," CAWM Discussion Papers 115, University of Münster, Münster Center for Economic Policy (MEP).

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