ON MAJORITARIAN BARGAINING WITH INCOMPLETE INFORMATION

This article studies a finite horizon version of Baron and Ferejohn's (American Political Science Review 83 (1989), 1181-206) majoritarian bargaining with incomplete information. Of many findings, we show that (i) allowing for delay can be optimal for a proposer; (ii) the revelation of a type d...

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Published inInternational economic review (Philadelphia) Vol. 51; no. 4; pp. 959 - 979
Main Authors Tsai, Tsung-Sheng, Yang, C. C.
Format Journal Article
LanguageEnglish
Published Malden, USA Blackwell Publishing Inc 01.11.2010
Wiley Periodicals on behalf of the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association
Blackwell Publishing Ltd
Subjects
A priori knowledge
Asymmetric information
Bargaining
Bargaining theory
Coalition bargaining
Coalitions
Collective bargaining
Conflict resolution
Disinformation
Economic models
Game theory
Information
Majority rule
Masquerades
Modeling
Propagation delay
Studies
Transponders
Voter turnout
Zero
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Summary:This article studies a finite horizon version of Baron and Ferejohn's (American Political Science Review 83 (1989), 1181-206) majoritarian bargaining with incomplete information. Of many findings, we show that (i) allowing for delay can be optimal for a proposer; (ii) the revelation of a type depends on two conflicting concerns, the "offer" concern à la Spence's signaling (the higher the type the better) and the "coalition inclusion" concern in a majority consent (the lower the type the better); and (iii) players take actions to distinguish themselves via delay, but separating equilibria often fail to exist due to incapability or unprofitability of exercising delay.
Bibliography:Manuscript received August 2007; revised December 2008.
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We are very grateful to Peter Norman for his guidance and suggestions. We also thank Meng‐Yu Liang and two anonymous referees for comments that led to significant improvements in the article. C.C. Yang gratefully acknowledges the financial support by the Taiwan NSC under grant No. NSC94‐2415‐H‐001‐026. Please address correspondence to: Tsung‐Sheng Tsai, Department of Economics, National Taiwan University, No. 21, Hsu‐Chow Road, Taipei 10055, Taiwan. Phone: +886‐2‐23519641 ex 444. Fax: +886‐2‐23511826. E‐mail
tstsai@ntu.edu.tw
.
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ISSN:0020-6598
1468-2354
DOI:10.1111/j.1468-2354.2010.00607.x