Alternating-Offer Bargaining Games over the Gaussian Interference Channel

This paper tackles the problem of how two selfish users jointly determine the operating point in the achievable rate region of a two-user Gaussian interference channel through bargaining. In previous work, incentive conditions for two users to cooperate using a simple version of Han-Kobayashi scheme was studied and the Nash bargaining solution (NBS) was used to obtain a fair operating point. Here a noncooperative bargaining game of alternating offers is adopted to model the bargaining process and rates resulting from the equilibrium outcome are analyzed. In particular, it is shown that the operating point resulting from the formulated bargaining game depends on the cost of delay in bargaining and how bargaining proceeds. If the associated bargaining problem is regular, a unique perfect equilibrium exists and lies on the individual rational efficient frontier of the achievable rate region. Besides, the equilibrium outcome approaches the NBS if the bargaining costs of both users are negligible.Comment: 8 pages, 6 figures, to appear in Proceedings of Forty-Eighth Annual Allerton Conference on Communication, Control, and Computin

Individual vs. Collective Bargaining in the Large Firm Search Model

We analyze the welfare and employment effects of different wage bargaining regimes. Within the large firm search model, we show that collective bargaining affects employment via two channels. Collective bargaining exerts opposing effects on job creation and wage setting. Firms have a stronger incentive for strategic employment, while workers benefit from the threat of a strike. We find that the employment increase due to the strategic motive is dominated by the employment decrease due to the increase in workers' threat point. In aggregate equilibrium, employment is ineciently low under collective bargaining. But it is not always true that equilibrium wages exceed those under individual bargaining. If unemployment benefits are sufficiently low, collectively bargained wages are smaller. The theory sheds new light on policies concerned with strategic employment and the relation between replacement rates and the extent of collective wage bargaining

Bargaining over a finite set of alternatives

We analyze bilateral bargaining over a finite set of alternatives. We look for “good” ordinal solutions to such problems and show that Unanimity Compromise and Rational Compromise are the only bargaining rules that satisfy a basic set of properties. We then extend our analysis to admit problems with countably infinite alternatives. We show that, on this class, no bargaining rule choosing finite subsets of alternatives can be neutral. When rephrased in the utility framework of Nash (1950), this implies that there is no ordinal bargaining rule that is finite-valued

Collective Bargaining under EMU: Lessons from the Italian and Spanish Experiences, CES Working Paper, no. 72, February 2000

This paper seeks to shed light on the question of the likely evolution of collective bargaining in Europe under EMU by considering the experiences of two countries (Italy and Spain) in which governments and social actors attempted to decentralized collective bargaining during the 1980s only to opt in favor of a re-centralization of bargaining during the 1990s. The paper argues that the experiences of Italy and Spain offer two kinds of insights for our understanding of the future evolution of wage bargaining in the EU. On the one hand, they illustrate why governments and social actors may come to favor a consolidation of the structure of bargaining under EMU rather than opt for a further decentralization of bargaining. On the other hand, they also suggest that any such process of consolidation faces great obstacles in moving beyond the national level. The recent experiences of Italy and Spain thus lead us to conclude that the most likely outcome in the EU is that of a reaffirmation of the national and national/sectoral-levels of bargaining within member states, rather than either a radical decentralization of bargaining across the EU, or an effective shift to EU-level bargaining

Fiscal federalism and bargaining over transfers

In this paper we provide a theoretical analysis of transfer sharing in a federalist economy by means of bargaining among regions and the federal government. The federal government could decide either to negotiate simultaneously with each region (bilateral negotiation), to negotiate with all regions together at the same table (multilateral negotiation), to negotiate under the pattern bargaining, or to negotiate under a sequential bargaining. Pattern bargaining is the most preferable bargaining way on the point of view of the federal government. However, with one-sided asymmetric spillover effects the federal government attains a higher payoff under multilateral bargaining.

Nash bargaining in ordinal environments

We analyze the implications of Nash’s (1950) axioms in ordinal bargaining environments; there, the scale invariance axiom needs to be strenghtened to take into account all order-preserving transformations of the agents’ utilities. This axiom, called ordinal invariance, is a very demanding one. For two-agents, it is violated by every strongly individually rational bargaining rule. In general, no ordinally invariant bargaining rule satisfies the other three axioms of Nash. Parallel to Roth (1977), we introduce a weaker independence of irrelevant alternatives axiom that we argue is better suited for ordinally invariant bargaining rules. We show that the three-agent Shapley-Shubik bargaining rule uniquely satisfies ordinal invariance, Pareto optimality, symmetry, and this weaker independence of irrelevant alternatives axiom. We also analyze the implications of other independence axioms

Bargaining and the Provision of Health Services

We model and compare the bargaining process between a purchaser of health services, such as a health authority, and a provider (the hospital) in three plausible scenarios: a) the purchaser sets the price, and activity is bargained between the purchaser and the provider: activity bargaining; b) the price is bargained between the purchaser and the provider, but activity is chosen unilaterally by the provider: price bargaining; c) price and activity are simultaneously bargained between the purchaser and the provider: efficient bargaining. We show that: 1) if the bargaining power of the purchaser is high (low), efficient bargaining leads to higher (lower) activity and purchaser's utility, and lower (higher) prices and provider's utility compared to price bargaining. 2) In activity bargaining, prices are lowest, the purchaser's utility is highest and the provider's utility is lowest; activity is generally lowest, but higher than in price bargaining for high bargaining power of the purchaser. 3) If the purchaser has higher bargaining power, this reduces prices and activity in price bargaining, it reduces prices but increases activity in activity bargaining, and it reduces prices but has no effect on activity in efficient bargaining.bargaining. negotiation. purchasing.