I develop a theory of intermediation in a market where agents meet bilaterally to trade and buyers cannot commit to payments. Some agents observe the past trading history of traders in the market. These informed agents can secure trades by punishing traders who previously defaulted. The...

The rise of a new power may lead the dominant power to seek a preventive war. We study this scenario in an experimental two-stage bargaining game. In each stage, the rising power makes a bargaining offer and the declining power must choose whether to accept it or fight. Between the two stages,...

We develop a framework of group corruption via back-door negotiations between an outside initiator and an authority of decision-makers in a hierarchical organization. We examine the role played by the architecture of a multi-tier authority and determine under such a structure how bargaining...

In this paper, we apply the preplay negotiation procedure proposed by Kalai (1981) to the n -person prisoners’ dilemma with n ≥ 3 and examine whether it generates cooperation. We show that if the preplay is carried out at least once, the preplay game has a perfect equilibrium point that...

Each bargaining problem generally involves two stages. A bargaining solution needs to decide what actions to take and how to share values. This note extends the Nash bargaining solution to such two-stage bargaining problems

The notion of envy-freeness is a natural and intuitive fairness requirement in resource allocation. With indivisible goods, such fair allocations are unfortunately not guaranteed to exist. Classical works have avoided this issue by introducing an additional divisible resource, i.e., money, to...

Numerous studies have examined the effect on credit spreads of renegotiation. These studies have generally focussed on the impact on spread levels in general, and not on how renegotiation influences the relative pricing of senior versus junior debt claims. In this paper, we show that the scope...

Bargaining power affects the terms of trade negotiated between agents in the economy. When multiple players with interrelated payoffs negotiate contracts, the outcome of each negotiation depends on all the players' bargaining powers. In a model in which a buyer negotiates in sequence with two...

In a bargaining paradigm, we investigated the influence of reputational concern and monetary gain on generosity and deception. 141 schoolchildren aged between 7 to 12 participated in an ultimatum bargaining game. As proposers, they were asked to split a monetary resource with a hypothetical...

We conduct a series of laboratory experiments to understand if gradual exogenous revelation of sellers’ private information influences how trades occur in both the competitive market and bilateral bargaining settings where a static lemon condition holds. Our experiments implement the Daley and...