Date:
Location:
Today's Speaker
Bård Harstad (University of Oslo), "A Theory of Pledge-and-Review Bargaining"
Abstract
This paper presents a novel bargaining game where every party is proposing only
its own contribution, before the set of pledges must be unanimously approved. I
show that, with uncertain tolerance for delay, each equilibrium pledge maximizes
an asymmetric Nash product. The weights on others' payoffs increase in the uncertainty, but decrease in the correlation of the shocks. The weights vary pledge
to pledge, and this implies that the outcome is generically inefficient. The Nash
demand game and its mapping to the Nash bargaining solution follow as a limiting case. The model sheds light on the Paris climate change agreement, but it
also applies to negotiations between policymakers or business partners that have
differentiated responsibilities or expertise.
Co-sponsored by FAS and IQSS, the Alberto Alesina Seminar on Political Economy supports research-related activities that integrate the study of economics and politics, whether by studying economic behavior in the political process or political behavior in the marketplace. In general, positive political economy is concerned with showing how observed differences among institutions affect political and economic outcomes in various social, economic, and political systems and how the institutions themselves change and develop in response to individual and collective beliefs, preferences, and strategies.
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All interested faculty and students are invited to attend.