Group Bargaining and Conflict

42 Pages Posted: 14 Nov 2010

See all articles by Nicolas Querou

Nicolas Querou

Queen's University Belfast - School of Management and Economics

Date Written: November 12, 2010

Abstract

We consider a situation where groups negotiate over the allocation of a surplus (which is used to fund group specific goods). Each group is composed of agents who have differing valuations for public goods. Members choose a representative to take decisions on their behalf. Specifically, representatives can decide to enter either a (cooperative) negotiation protocol or a conflict to appropriate the surplus. In the cooperative negotiations, disagreement corresponds to a pro rata allocation (as a function of the size of the groups). We analyse the conditions (on the internal composition of the groups) under which conflict will be preferred to negotiated agreements (and vice versa), and we derive welfare implications. Finally, we provide results of comparative statics that highlight the influence of changes in the internal composition of groups and in their relative size on the profitability of negotiated agreements.

Keywords: Bargaining, Conflict, Agency Problem

JEL Classification: C78, D74, J52

Suggested Citation

Querou, Nicolas, Group Bargaining and Conflict (November 12, 2010). FEEM Working Paper No. 125.2010, Available at SSRN: https://ssrn.com/abstract=1707946 or http://dx.doi.org/10.2139/ssrn.1707946

Nicolas Querou (Contact Author)

Queen's University Belfast - School of Management and Economics ( email )

25 University Square
Belfast, Northern Ireland BT7 1NN
Northern Ireland

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