Rational economic agents always engage in maximizing their payoffs. The endeavor in this paper is to show that when the parties involved in the bargaining process (game) have similar discount factors and when the number of periods of the game tends to infinity or very large, then the surplus is...

Conventional wisdom says that economic surplus is created when the cost of litigation is foregone in favor of settlement, a theory flowing from the Coase Theorem. The cost-benefit analysis weighs settlement against the expected value of litigation net of transaction cost. This calculus yields...

Prior research on "strategic voting" has reached the conclusion that unanimity rule is uniquely bad: it results in destruction of information, and hence makes voters worse off. We show that this conclusion depends critically on the assumption that the issue being voted on is exogenous, i.e.,...

When will a landlord prefer to supply both land and credit to a tenant rather than allow the lender to borrow from a separate moneylender? The paper shows that if tenancy contracts are obtained prior to contracting with the moneylender, and the tenant has limited liability, interlinked deals...

Prior research on quot;strategic votingquot; has reached the conclusion that unanimity rule is uniquely bad: it results in destruction of information, and hence makes voters worse off. We show that this conclusion depends critically on the assumption that the issue being voted on is exogenous,...

Bargaining models ask how a surplus is split between two parties in bilateral monopoly. Much of real-world negotiation involves complications to the original split which may or may not increase the welfare of both parties. The parties must decide which complications to propose, how closely to...

We conduct an experimental analysis of bargaining under asymmetric information, where the dispute resolution mechanism can be interpreted either as a civil trial or conventional arbitration. In our treatment, we allow for credible and costless transmission of private information. Consistent with...

This short paper demonstrates that the equilibrium payoffs of an alternating-offers bargaining game over a unit of surplus converge to equal division provided that the parties are allowed to bargain over all the surpluses generated by the "right" to be the first to make offers. The result...

We use a two-issue bargaining model with asymmetric information to study agent choice of how to structure bargaining. We uncover the settings in which different agenda structures are chosen in equilibrium, how the order in which issues are bargained over matters, and what impact the rules for...