This study investigates in a two-stage two-player model how the decision to make an ultimatum and how much to demand depends on the impatience of the agents and the pie uncertainty. First, players simultaneously decide on their ultimatums. If the ultimatum(s) are compatible then the player(s)...

This study investigates under what circumstances there exist a separating equilibrium in which competent leaders choose incompetent co-workers and incompetent leaders choose competent co-workers. The driving force for the competent leader is the insurance motive; if things go wrong he can blame...

A separating equilibrium in which competent (incompetent) leaders choose competent (incompetent) co-workers is investigated. An outside observer rewards the leader at good policy outcomes. The incompetent co-worker can, at bad outcomes, be used as scapegoat. By assumption, the leader may fail in...