On Vind’s theorem for an economy with atoms and infinitely many commodities

We extend Vind’s classical theorem on the measure of blocking coalitions valid in finite dimensional atomless economies (see Vind (1972)), to include the possibility of infinitely many commodities as well as the presence of atoms. The commodity space is assumed to be an ordered Banach space which has possibly the empty positive cone. The lack of interior points is compensated by an additional assumption of a cone of arbitrage that allows us to use Lyapunov’s convexity theorem in its weak form. The measure space of agents involves both negligible and non negligible traders. The extension is proved in the general class of Aubin coalitions for which a suitable version of Grodal’s result (Grodal (1972)) is also formulated. Our results wish to point out the relevance of cone conditions dealing with blocking coalitions of arbitrary measure or weight.     

Game Theoretic Models of Wage Bargaining

This paper aims at being a tool to help apply game theoretic bargaining models to wage negotiations. In this perspective, we review a number of articles which explicitly deal with wage determination as well as purely game theoretical models which we believe can be fruitfully extended to account for specific features of labour markets. We discuss some common shortcomings in the wage negotiation literature, and suggest possible lines of research worth pursuing to deal with such weaknesses.     

Power and efficiency in production pillage games

A pillage game is a formal model of Hobbesian anarchy as a coalitional game. The technology of pillage is specified by a power function that determines the power of each coalition as a function of its members and their wealth. A coalition can despoil any other coalition less powerful than itself. The present paper studies the problem of achieving an efficient allocation of resources when the required reallocation changes the distribution of power. For example, land redistribution may increase total production, but may also deprive the original owners of the power they need to compel compensation. In this case the original owners would block the redistribution. Previous work on pillage games has focused on the stable set (von Neumann–Morgenstern solution) as a representation of a stable balance of power. However, the balance of power is typically too delicate to support all efficient allocations. The present paper shows that for a large class of power functions, a recently developed extension of the stable set, called the legitimate set, can be rich enough to support all efficient allocations.      

The commuting time paradox

We examine the conditions for the ‘commuting time paradox’ which states that the average commuting time does not vary between different periods. We develop therefore an equilibrium job search model with endogenously chosen commuting costs. Presuming wage bargaining between workers and firms, the optimally chosen maximum commuting costs jointly maximise the worker's and firm's payoffs. We demonstrate that when productivity levels increase over time, average commuting costs and average wages both increase, which affects the optimally chosen commuting time. We establish the conditions under which the paradox holds.     

Arbitration systems and negotiations

We consider a model of bargaining by concessions where agents can terminate negotiations by accepting the settlement of an arbitrator. The impact of pragmatic arbitrators—that enforce concessions that precede their appointment—is compared with that of arbitrators that act on principle—ignoring prior concessions. We show that while the impact of arbitration always depends on how costly that intervention is relative to direct negotiation, the range of scenarios for which it has an impact, and the precise effect of such impact, does change depending on the behavior—pragmatic or on principle—of the arbitrator. Moreover the requirement of mutual consent to appoint the arbitrator matters only when he is pragmatic. Efficiency and equilibrium are not aligned since agents sometimes reach negotiated agreements when an arbitrated settlement is more efficient and vice versa. What system of arbitration has the best performance depends on the arbitration and negotiation costs, and each can be optimal for plausible environments.      

How to select a Supply Chain Finance solution?

In the complex picture of Supply Chain Finance (SCF), there is still a need for a model supporting managerial decisions in selecting the most suitable financing solution. The objective of the presented exploratory work is to bring together the relational aspects between buyers and suppliers, and the characteristics of SCF solutions. Based on expert interviews and a focus group, the main result consists of a classification model of buyer-led SCF solutions, according to the characteristics of the relationship between a buyer and its suppliers, in terms of bargaining power and cumulative transaction value. The model thus describes the logics behind the adoption by a buyer firm of one or more SCF solutions to be implemented with different suppliers.     

The Impact of Compulsory Arbitration on Bargaining Behavior: An Experimental Study

A series of experiments compares bargaining behavior under three different settings: no arbitration, conventional and final-offer arbitration. Under no arbitration, disputes with zero payoffs were around 10%, while the pie was equally split in less than half of the cases. Under conventional arbitration – where the arbitrator is free to choose his award – every third negotiation ended in dispute, evidencing a modified chilling effect. Under final-offer arbitration – where the arbitrator must award the bargainers either one of their final offers – there was only a small increase in disputes, while equal splits doubled to 80%. The experiment shows that final-offer arbitration, despite having lower dispute rates, interferes more with bargaining behavior than conventional arbitration, where bargaining behavior is similar to that seen in the no-arbitration treatment. Under final-offer arbitration, negotiators adjust their bargaining strategy on the arbitrator’s expected award.     

Bargaining: separately or together?

This paper explores conditions under which economic agents will want to bargain collectively instead of individually with a common third party—when, for example, two firms (or unions), who are bargaining with the same, indispensable, outside party, will want to merge and bargain as one. I use a non-cooperative sequential bargaining model to analyze this question. Previous work has shown that agents prefer to bargain collectively if they are substitutes for each other in production. This result, however, depends on an exogenously fixed sequence of bargaining. I allow the bargaining sequence to be determined endogenously and investigate how incentives for collective bargaining vary with heterogeneity when delay is costly. The previous results are not robust when the agents are substitutes. In particular, substitute agents prefer individual to collective bargaining if they are heterogeneous and sufficiently patient. In the presence of transaction costs, substitutability of agents is no longer the sole determinant of collectivization. Rather, the degree of heterogeneity in production, in conjunction with the degree of substitutability between agents determine the incentives for collective action.     

社会地位对宏观经济变量的动态影响——基于两部门搜索均衡模型的研究

本文将失业理论的搜索模型与社会地位结合起来考察社会地位的动态影响。研究发现社会地位引入效用函数等价于代表性家庭时间偏好率的降低,利用对数效用函数,得到经济系统均衡状态存在的唯一性。在均衡状态下,更强的社会地位意识意味着更高的储蓄率和资本积累,以及提供更多的社会空闲职位、更高的工资、更高的就业率、更为宽松的劳动力市场和更低的利率。     

Negotiation games with unobservable mixed disagreement actions

A negotiation model combines an alternating offers bargaining game with a normal form stage game that determines players’ (interim) disagreement payoffs. Busch and Wen [Econometrica 63 (1995) 545] investigated this negotiation model under the assumption that players’ past mixed disagreement actions are observable. The question arises if this assumption is a substantial restriction. In this paper, we adopt the more plausible assumption that only the realizations of past mixed actions are observable, and find that the set of equilibrium payoffs shrinks, compared to that when mixed disagreement actions are observable. We precisely identify the effects of the unobservability and characterize the limiting set of equilibrium payoffs as the two players become sufficiently patient.     

Distressed exchange,bargaining power,and prior capital structure

Financially troubled companies often make Distressed Exchange (DE) offers to its creditors, to postpone costly bankruptcy reorganization. We derive the optimal terms and timing of a DE offer consisting of debt reduction and an equity stake in the restructured firm. The DE terms and timing are affected by shareholder bargaining power, with greater shareholder bargaining power resulting in earlier DE offer, smaller debt reduction and smaller equity stake. The impact of shareholder bargaining power is greater when bankruptcy cost is larger and tax rate is higher. We also show that renegotiability of debt increases ex-ante firm value and results in a higher optimal leverage ratio. Both firm value and optimal leverage ratio are decreasing functions of shareholder bargaining power.     

Reject and renegotiate: The Shapley value in multilateral bargaining

This paper investigates three distinctive and intuitive renegotiation bargaining protocols that all yield the Shapley value as the unique subgame perfect equilibrium outcome. These protocols, built on the multi-bidding procedure of Pérez-Castrillo and Wettstein (2001), allow more freedom in multilateral bargaining where rejected players can further negotiate and form coalitions. The self-duality of the Shapley value plays a key role in the second and third results. Moreover, these renegotiation protocols allow an actual play along the equilibrium path to restore the Shapley value in case of a ‘mistake’ made before.