We examine settings - such as litigation, labor relations, or arming and war - in which players first make non-contractible up-front investments to improve their bargaining position and gain advantage for possible future conflict. Bargaining is efficient ex post, but we show that a player may...

This paper performs a welfare analysis of economies with private information when public information is endogenously generated and agents can condition on noisy public statistics in the rational expectations tradition. We find that equilibrium is not (restricted) efficient even when feasible...

A power measure is monotone if a player with a larger weight is assigned at least as much power as a player with a smaller weight in the same weighted majority game. Failure of a power index to satisfy monotonicity is often considered a pathological feature. In this paper, we show that...

A seller bargains with a rationally inattentive buyer (Sims, 2003) over a good of random quality. After observing quality, the seller makes a take-it-or-leave-it offer. The buyer pays attention to the seller's product and offer at a cost proportional to expected entropy reduction. Because...

Experiments show that in sequential bargaining games (SBG), subjects usually deviate from game-theoretic predictions. Previous explanations have focused on considerations of fairness in the offers, and social utility functions have been formulated to model the data. However, a recent explanation...

This study considers the "rational negotiator model" (homo-negotiator) as a new scientific logical standard for negotiation studies, and proposes axioms, definitions, and principles of the rational negotiator model that are essential for this purpose.In negotiation studies, it is common to...

This study considers the "rational negotiator model" (homo - negotiator) as a new scientific logical standard for negotiation studies, and proposes axioms, definitions, and principles of the rational negotiator model that are essential for this purpose. In negotiation studies, it is common to...

We characterize the unique Markov perfect equilibrium of a tug-of-war without exogenous noise, in which players have the opportunity to engage in a sequence of battles in an attempt to win the war. Each battle is an all-pay auction in which the player expending the greater resources wins. In...