| Bargaining is essential to economics. My dissertation attempts to contribute to the understanding of bargaining procedures and solutions, using both strategic and axiomatic approaches.; Rubinstein suggested a bargaining procedure, which has a unique subgame perfect equilibrium (Econometrica, 1982). Applied to multi-issue bargaining, this theory assumes that all issues must be bundled in every offer, thereby missing many of the complexities of the multi-issue problem. In the first chapter, co-authored with Roberto Serrano, I study two bilateral multi-issue bargaining procedures with complete information. In the first procedure, proposals must be made on only one issue at a time, although the proposer can choose which issue to bring to the table. In this procedure, when bargaining frictions are small, there is a large multiplicity of equilibrium agreements, including ones with arbitrarily long delays. In the second procedure, offers can be made on any subset of remaining issues and, under similar conditions as in Rubinstein, there is a unique and efficient equilibrium payoff.; In the second chapter, I apply the previous two procedures to the case where each issue is associated with a finite set of alternatives. In both procedures, when bargaining frictions are small, I find a large multiplicity of equilibrium agreements, including ones with arbitrarily long delays. Thus, this chapter extends previous results for the single-issue case. Confronting a recent study, this implies that it is not necessary to appeal to “strictly controversial” issues in order to find multiplicity and delay in agreements.; While the first two chapters employ the strategic approach, the third chapter adopts the axiomatic approach. I study the issue of the relevance of alternatives in a bargaining problem. For a class of bargaining solutions, I devise partial orderings based on the size of the set of relevant alternatives, and introduce an axiom called Dependence on All Alternatives (DAA). I identify axioms of strict sensitivity that explain DAA and relate them to previous axioms in the literature. Although most well-known bargaining solutions do not satisfy DAA, I show numerous solutions, based on average agreements, that do. This chapter concludes by characterizing this new class of bargaining solutions. |
