Breakdown in Multilateral Negotiations
28 Pages Posted: 11 Oct 2012
Date Written: October 10, 2012
Abstract
We analyze a complete information multilateral bargaining model in which a buyer is to purchase several complementary goods from several sellers. Binding cash-offer contracts are used to govern transactions. In contrast to the preexisting literature, we do not normalize the parties' reservation utilities to zero. This allows us to demonstrate that in a large class of bargaining games a complete breakdown of negotiations can occur as the unique equilibrium outcome even if only two sellers are present.
Keywords: multilateral bargaining, complete information, breakdown, Coase theorem
JEL Classification: C78, D23, D62
Suggested Citation: Suggested Citation
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