Citation

Discussion Paper Details

Please find the details for DP7774 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Bargaining cum Voice

Author(s): Hans Gersbach and Hans Haller

Publication Date: April 2010

Keyword(s): articulation of outside options, bargaining, Competitive equilibria, group formation and Power of Voice

Programme Area(s): Industrial Organization

Abstract: We propose a formal concept of the power of voice in the context of a simple model where individuals form groups and trade in competitive markets. Individuals use outside options in two different ways. Actual outside options reflect the possibility to exit or to join other existing groups. Hypothetical outside options refer to hypothetical groups that are ultimately not formed. Articulation of hypothetical outside options in the bargaining process determines the relative bargaining power of the members of a group, which constitutes an instance of the power of voice. The adopted equilibrium concept, competitive equilibrium with free group formation and bargaining cum voice, endogenizes the outside options as well as the power of voice. We establish existence of such equilibria and we explore their properties.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=7774

Bibliographic Reference

Gersbach, H and Haller, H. 2010. 'Bargaining cum Voice'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=7774