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Hanging together or being hung separately: the strategic power of coalitions where bargaining occurs with incomplete information
[working paper]
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Wissenschaftszentrum Berlin für Sozialforschung gGmbH
Abstract
What is the strategic role of membership in an intergovernmental group with unanimity requirements if the group negotiates with an external player in a setting with incomplete information? Being in such a group has a strategic effect compared to negotiating as a stand-alone player and reduces the de... view more
What is the strategic role of membership in an intergovernmental group with unanimity requirements if the group negotiates with an external player in a setting with incomplete information? Being in such a group has a strategic effect compared to negotiating as a stand-alone player and reduces the demands of the outside player: being in a group lends additional bargaining power. Negotiating as a group may also cause more inefficiencies due to bargaining failure, and this might harm the intergovernmental group. We uncover the role of preference alignment and preference independence between members of the coalition group for equilibrium payoffs and welfare effects. In this analysis we also distinguish between coalition groups with and without side payments. Overall, coalition groups tend to perform well for the members of the coalition group in comparison to fully decentralized negotiations, particularly if the objectives of the members of the coalition group are not always perfectly aligned. (author's abstract)... view less
Keywords
coalition; negotiation; power; strategy; group; information
Classification
Organizational Sociology
Document language
English
Publication Year
2013
City
Berlin
Page/Pages
30 p.
Series
Discussion Papers / Wissenschaftszentrum Berlin für Sozialforschung, Forschungsschwerpunkt Markt und Entscheidung, Abteilung Verhalten auf Märkten, SP II 2013-202
Handle
https://hdl.handle.net/10419/71138
Status
Published Version; reviewed
Licence
Deposit Licence - No Redistribution, No Modifications