Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/19132
Authors: 
Gersbach, Hans
Haller, Hans
Year of Publication: 
2006
Series/Report no.: 
CESifo Working Paper 1668
Abstract: 
We propose a formal concept of the power of voice in the context of a simple model where individuals form groups and trade in competitive markets. Individuals use outside options in two different ways. Actual outside options reflect the possibility to exit or to join other existing groups. Hypothetical outside options refer to hypothetical groups that are ultimately not formed. Articulation of hypothetical outside options in the bargaining process determines the relative bargaining power of the members of a group, which constitutes an instance of the power of voice. The adopted equilibrium concept endogenizes the outside options as well as the power of voice. In our illustrative example, there exists an equilibrium that uniquely determines the power of voice and the allocation of commodities.
Subjects: 
Power of Voice
competitive equilibria
group formation
bargaining
articulation of outside options
JEL: 
D13
D5
D71
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.