A unionized duopoly model to analyse how unions affect the incentives for merger is considered. It is found that both firms will merge if and only if unions are weak. However, once surplus-maximizing unions have the option to delegate the wage bargaining to wage-maximizing delegates (such as senior union members), both firms may have incentives to merge even if the union bargaining power is str...

We study a two person bargaining problem in which the buyer may invest and increase his valuation of the object before bargaining. We show that if all offers are made by the seller and the time between offers is small, then the buyer invests efficiently and the seller extracts all of the surplus. Hence, bargaining with frequently repeated offers remedies the hold-up problem even when the agent ...

We establish the bid-equivalence between an independent private-value (IPV) …rst-price auction model with resale and a model of …rst-price common-value auction, when the resale market satis…es a minimal ef…ciency property and the common value is de…ned by the transaction price. With an application of the Coase Theorem, we show two polar cases in which auctions with resale have opposite properti...

I study a bilateral bargaining game in which the size of the surplus follows a stochastic process and in which players might be optimistic about their bargaining power. Following Yildiz (2003), I model optimism by assuming that players have different beliefs about the recognition process. I show that the unique subgame perfect equilibrium of this game might involve inefficient delays. I also sh...

The bargaining approach can be usefully applied to address some classical questions in cooperative game theory. One of these concerns the formation of coalitions and the writing of binding agreements among groups of players. Many years ago, Ronald Coase argued that such negotiations would invariably end in an efficient outcome, and that bargaining power — whatever that is — would be reflected i...

Climate negotiations occur against the backdrop of increasing collective risk: each failure to agree on how to share the costs of climate change mitigation increases the odds of significant economic loss for the negotiating parties. Nonetheless, no existing climate bargaining model includes this characteristic feature. We introduce a novel bargaining game that incorporates collective risk, and ...

Many assemblies grant one or more of their members the right to block decisions even when a proposal has secured the necessary majority—a veto right. In this paper, I analyze the consequences of veto power in an infinitely repeated divide-the-dollar bargaining game with an endogenous status quo policy. The division of the dollar among legislators is unchanged until the committee agrees on a new...

This paper proposes an economic dispatch strategy for the electricity system with one generation company, multiple utility companies and multiple consumers, which participate in demand response to keep the electricity real-time balance. In the wholesale markets, multiple utility companies will commonly select a reliable agent to negotiate with the generation company on the wholesale price. It i...

Many multiagent settings require a collection of agents to partition themselves into coalitions. In such cases, the agents may have conflicting preferences over the possible coalition structures that may form. We investigate a noncooperative bargaining game to allow the agents to resolve such conflicts and partition themselves into non-overlapping coalitions. The game has a finite horizon and i...