Bargaining Order in a Multi-Person Bargaining Game

Jun Xiao
2012 Social Science Research Network  
This paper studies a complete-information bargaining game with one buyer and multiple sellers of different "sizes" or bargaining strengths. The bargaining order is determined by the buyer. If the bargaining has a finite horizon, there is a unique subgame perfect equilibrium outcome in which the buyer purchases in order of increasing size -from the smallest to the largest. With an infinite horizon, there is a unique equilibrium outcome with the same bargaining order if the sellers are of
more » ... ntly different sizes. With an infinite horizon, there are multiple equilibria with different bargaining orders if the sellers have similar sizes. However, if the buyer can commit to the order in which she bargains with the sellers, she will commit to the order of increasing size. JEL classification: C78
doi:10.2139/ssrn.2578163 fatcat:r6k3rsjjvbcl3pkytcc47ke4bi