Breakdown in Multilateral Negotiations

28 Pages Posted: 11 Oct 2012

See all articles by Daniel Göller

Daniel Göller

University of Agder - Department of Economics and Finance, School of Business and Law

Michael Hewer

University of Bonn

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

Göller, Daniel and Hewer, Michael, Breakdown in Multilateral Negotiations (October 10, 2012). Available at SSRN: https://ssrn.com/abstract=2159693 or http://dx.doi.org/10.2139/ssrn.2159693

Daniel Göller (Contact Author)

University of Agder - Department of Economics and Finance, School of Business and Law ( email )

Serviceboks 422
N-4604 Kristiansand, VEST AGDER 4604
Norway

Michael Hewer

University of Bonn ( email )

Regina-Pacis-Weg 3
Postfach 2220
Bonn, D-53012
Germany

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