We theoretically investigate how the application of unanimity rule can lead to inefficient delay in collective decision making. We do so in the context of a distributive multilateral bargaining model featuring strategic pre-commitment. Prior to each bargaining round, players can declare a...

We extend the Baron and Ferejohn (1989) model of multilateral bargaining by allowing the players to attempt commiting to a bargaining position prior to negotiating. If successful, commitment binds a player to reject any proposal which allocates to her a share below a self-imposed threshold. Any...

We exploit a controlled frameless laboratory experiment to study settlement negotiations and the plaintiff's decision to raise a lawsuit in case of an impasse. We find that greater variance in court outcomes increases the litigation rate and lowers the settlement rate. This latter finding goes...

We theoretically investigate the effects of strategic pre-commitment in multilateral dynamic bargaining. Each round features a commitment stage in which players can declare that they will reject any proposal giving them less than a self-imposed threshold. Such declarations bind in the ensuing...

Gambling for the Upper Hand - Settlement Negotiations in the Lab

We theoretically investigate how the application of unanimity rule can lead to inefficient delay in collective decision making. We do so in the context of a distributive multilateral bargaining model featuring strategic pre-commitment. Prior to each bargaining round, players can declare a...

We extend the Baron and Ferejohn (1989) model of multilateral bargaining by allowing the players to attempt commiting to a bargaining position prior to negotiating. If successful, commitment binds a player to reject any proposal which allocates to her a share below a self-imposed threshold. Any...

We build a simple formal model of governance. Investments and control rights over assets and labor are fully contractible, but final production decisions are ex ante uncontractible, and ex post negotiations are inefficient. If sunk costs are low, suppliers own assets and trade takes the form of...

We build a simple formal model of governance. Investments and control rights over assets and labor are fully contractible, but final production decisions are ex ante uncontractible, and ex post negotiations are inefficient. If sunk costs are low, suppliers own assets and trade takes the form of...