Alliances and Negotiations

U of London Queen Mary Economics Working Paper No. 424

29 Pages Posted: 18 Feb 2001

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: November 2000

Abstract

A characteristic of many bargaining situations is that the negotiators represents the interests of a set of parties (trade unions, political parties, etc.) with composite interests, whose bargaining behaviour is regulated by some collective decision mechanism. In this paper we provide a natural model of such circumstances, and show how different preference aggregation procedures within the composite player affect the bargaining outcome. In particular we find that unanimity procedures lead to 'more aggressive' behaviour than majority procedures, and that procedures which introduce minimum safeguards for the members of an alliance may result in agreements that are worse than without those safeguards.

Keywords: Alliances, multiperson bargaining

JEL Classification: C78, D1, D2, D3, D4

Suggested Citation

Manzini, Paola and Mariotti, Marco, Alliances and Negotiations (November 2000). U of London Queen Mary Economics Working Paper No. 424. Available at SSRN: https://ssrn.com/abstract=251720 or http://dx.doi.org/10.2139/ssrn.251720

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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