Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/312864 
Authors: 
Year of Publication: 
2024
Series/Report no.: 
AWI Discussion Paper Series No. 756
Publisher: 
University of Heidelberg, Department of Economics, Heidelberg
Abstract: 
This paper theoretically investigates the strategic implications of varying reliability of bargaining partners under unanimous and non-unanimous voting. Three players (one proposer, two responders) bargain over the distribution of a pie. One responder has private information about his valuation of finding an agreement, implying signaling values that differ substantially between voting rules and are affected by the other responder's reliability. Under unanimity rule, the responder with private information benefits from voting "no" because this signals that he requires a larger compensation in a future period. In contrast, under majority rule, voting "no" is unattractive due to the fear of being excluded from a future coalition. Under both voting rules, one responder becoming less reliable negatively affects the other responder's willingness to vote "yes", making efficient agreements increasingly difficult to achieve. The presence of unreliable parties can under majority rule lead to more parties being included in the winning coalition, as demonstrated by an extension of the model.
Subjects: 
bargaining
majority
unanimity
unreliability
private information
JEL: 
C78
D72
P48
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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