Bargaining in the Shadow of Power

  title={Bargaining in the Shadow of Power},
  author={Robert Powell},
  journal={Games and Economic Behavior},
  • R. Powell
  • Published 1996
  • Economics
  • Games and Economic Behavior
Abstract Often a bargainer can use some form of power—legal, military, or political—to impose a settlement. How does the “outside” option of being able to impose a settlement, albeit at some cost, affect the bargaining? And, how does the probability that the bargaining will break down vary with the distribution of power between the bargainers? These questions are examined by adding the option of imposing a settlement to Rubinstein's game of dividing a pie. Each actor can accept an offer, make a… Expand

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