This paper considers social contracts (or mechanisms) in negotiations with incomplete information in which an outside option is a probabilistic conflict and a peaceful agreement is ex ante efficient. Applications include partnership, labor-management bargaining, pretrial negotiations, and...

Two players with preferences distorted by the focusing effect (Koszegi and Szeidl, 2013) negotiate an agreement over several issues and one transfer. We show that, as long as their preferences are differentially distorted, an issue will be inefficiently left out of the agreement or inefficiently...

Belligerents could in principle avoid the ex post costs of conflict by revealing all private information about their violent capabilities and then calculating odds of success ex ante. Incentives to misrepresent private information for strategic gain, however, can cause miscalculations that lead...

This article determines the conditions under which the Southern countries should act together, or separately, while negotiating with the North about climate change policy and about the conditions for future Southern engagement. The paper models the international negotiations with complete and...

This article determines the conditions under which the Southern countries should act together, or separately, while negotiating with the North about climate change policy and about the conditions for future Southern engagement. The paper models the international negotiations with complete and...

We study the framing effects of communication in multiparty bargaining. Communication has been shown to be more truthful and revealing than predicted in equilibrium. Because talk is preference-revealing, it may effectively frame bargaining around a logic of fairness or competition, moving...

In the context of international bargaining, standard models predict that a shift in military power can cause preventive war because it changes the relative bargaining position between states. We find that shifts in military power are not the only cause of war under commitment problems and that...

I revisit the Rubinstein (1982) model for the classic problem of price haggling and show that bargaining can become a “trap,” where equilibrium leaves one party strictly worse off than if no transaction took place (e.g., the equilibrium price exceeds a buyer’s valuation). This arises when...

I analyze a sequential bargaining model in which players are optimistic about their bargaining power (measured as the probability of making offers), but learn as they play the game. I show that there exists a uniquely predetermined settlement date, such that in equilibrium the players always...