Bargaining in the Shadow of Power

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9422278 Powell Bargaining is ubiquitous. But the settings in which it takes place vary immensely, and these different settings shape the questions researchers ask about bargaining. Economists, for example, have generally focused on situations of voluntary exchange. A seller, for instance, cannot compel a buyer to pay more than the buyer believes the object for sale is worth; the seller and buyer must agree on a price. This focus on voluntary exchange leads naturally to a set of questions and concerns that have received an enormous amount of attention since Rubinstein's (1982) seminal paper renewed interest in noncooperative bargaining theory: Does bargaining lead to Pareto eflicient outcomes? Under what circumstances does Coase's theorem hold? What accounts for delay in reaching agreement? This project will use game-theoretic models of bargaining to examine the effects of the shadow of power on bargaining. Preliminary work has developed one model and employed it to study the relation between stability and the distribution of power in the context of international relations theory. The distribution of power is fixed in the that model. With support from the NSF, the model will be extended by letting the distribution of power vary over time. The work will investigate, first, how a time-varying distribution of power influences the timing and terms of agreements and, second, the factors affecting the "stickiness" of institutions and agreements. This study should advance and deepen our understanding of important questions in not only international relations but in political science more generally. ***