POLITICAL BRINKMANSHIP AND COMPROMISE

• 成果类型: Article
• 署名作者: Herrera, Helios; Mace, Antonin; Nunez, Matias
• 署名单位: University of Warwick; Centre for Economic Policy Research - UK; Paris School of Economics; Centre National de la Recherche Scientifique (CNRS); Universite PSL; Ecole Normale Superieure (ENS); Institut Polytechnique de Paris; ENSAE Paris; Centre National de la Recherche Scientifique (CNRS); Ecole Polytechnique
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12760
• 发表日期: 2025
• 页码: 1317-1339
• 关键词: stochastic-model; search; deadlines; options

摘要

We study how do-or-die threats ending negotiations affect gridlock and welfare when two opposing parties bargain. Failure to agree on a deal in any period implies a continuation of the negotiation. However, under brinkmanship, agreement failure in any period may precipitate a crisis with a small chance. In equilibrium, such brinkmanship threats improve the probability of an agreement, but also increase the risk of crisis. Brinkmanship reduces welfare when one might think it is most needed: severe gridlock. In this case, despite this global welfare loss, a party has incentives to use brinkmanship strategically to obtain a favorable bargaining position.