Joint Outside Options

Queen Mary & Westfield College Working Paper No. 401

41 Pages Posted: 2 Dec 1999

See all articles by Paola Manzini

Paola Manzini

University of St. Andrews - School of Economics and Finance; Institute for the Study of Labor (IZA)

Marco Mariotti

University of Exeter Business School - Department of Economics

Date Written: February 1999

Abstract

Several contractual situations are such that the parties may 'step out' of negotiations and take up outside opportunities only if there is mutual consent to do so. Examples include employer-employee negotiations, divorce and inheritance procedures, and arbitration. To analyse such cases we develop the general concept of a 'joint outside option' and study its effect in the standard bargaining game. Examples from the economics of divorce and theory of the firm are considered in some depth.

JEL Classification: C78

Suggested Citation

Manzini, Paola and Mariotti, Marco, Joint Outside Options (February 1999). Queen Mary & Westfield College Working Paper No. 401. Available at SSRN: https://ssrn.com/abstract=185652 or http://dx.doi.org/10.2139/ssrn.185652

Paola Manzini (Contact Author)

University of St. Andrews - School of Economics and Finance ( email )

North St
Saint Andrews, Fife KY16 9AJ
United Kingdom

HOME PAGE: http://www.st-andrews.ac.uk/~pm210/

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Marco Mariotti

University of Exeter Business School - Department of Economics ( email )

Streatham Court
Rennes Drive
Exeter EX4 4RJ
United Kingdom
+01392 263219 (Phone)
+01392 263242 (Fax)

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