We consider the impact of fairness and moral hazard in a principal-agent bargaining model, where the agent can affect the size of the surplus by his actions. Our main results are as follows; a) the offer predicted by the basic fairness model (excluding moral hazard) results in inefficient...

A standard result in bargaining with symmetric information is that agents exploit all gains from trade, and reach efficient agreements immediately. Models of delayed and inefficient agreements are typically based on asymmetric information regarding bargainer types. However, such models often...

We analyse a bargaining game in which two players (the internal stakeholder and the external party) bargain over the allocation of a fixed 'cake'. The internal stakeholder decides whether to bargain directly with the other player (involving Nash Bargaining). On the other hand, the internal...