Essays on bargaining and delegation

• Main Author: Segendorff, Björn
• Format: Doctoral Thesis
• Language: English
• Published: Handelshögskolan i Stockholm, Samhällsekonomi (S) 1998
• Subjects: Strategic delegation; Bargaining; Economics; Nationalekonomi
• Online Access: http://urn.kb.se/resolve?urn=urn:nbn:se:hhs:diva-666; http://nbn-resolving.de/urn:isbn:91-7258-469-6

This dissertation consists of three essays. Essay 1: Delegation and Threat in Bargaining.Two principals ("nations") appoint one agent each to bargain over the provision of a public good. Two institutional set-ups are studied, each with a different level of authority given to the agents. Here authority means the right to decide the own side's provision if negotiations break down. In equilibrium the principals choose agents with preferences differing from their own. The low-authority equilibrium Pareto dominates (with regard to the principals) the case of the principals deciding on the provisions simultaneously (autarchy). The high-authority equilibrium is Pareto dominated by the low-authority equilibrium and it may even be dominated by autarchy. Essay 2: Delegation of Bargaining and Power.Two principals simultaneously appoint one agent each and decide how much power to give to their agents. The agents' task is to bargain over the provision of a public good. Power here means the right to decide the own side's provision if negotiations break down. In equilibrium the principals delegate to agents that are relatively disinterested in the public good and give them all power. The fact that both principals have the possibility to delegate is, in equilibrium, harmful to at least one of them. The equilibrium may even be Pareto dominated by the outcome under autarchy. Essay 3: Labor- and Product-Market Structure and Excess Labour.This study analyzes under what labor- and product-market structures a firm may hire more labor than needed to produce its profit maximizing output. Three labor-market structures are studied: (1) decentralized (firm-specific unions), (2) one-sided centralization (central union and several firms), and (3) centralized (central union and employers' association). Excess labor is explained by the risk-sharing motive that in the model exists between the risk-averse workers and the risk-neutral firm owner. Labor may be excessively hired in any of the labor-market structures and under a wide range of product-market structures; duopoly, oligopoly etc. === Diss. Stockholm : Handelshögskolan, 1998