Opacity in Bargaining over Public Good Provision
Research output: Contribution to journal › Research article › Contributed › peer-review
Contributors
Abstract
We consider ultimatum bargaining over the provision of a public good. Offer-maker and responder can delegate their decisions to agents whose actual decision rules are opaque. We show that the responder will benefit from strategic opacity, even with bilateral delegation. The incomplete information created by strategic opacity choices does not lead to inefficient negotiation failure in equilibrium. Inefficiencies arise from an inefficient provision level. While an agreement will always be reached, the public good provision will fall short of the socially desirable level. Compared with unilateral delegation, bilateral delegation is never worse from a welfare perspective.
Details
Original language | English |
---|---|
Pages (from-to) | 1069-1095 |
Number of pages | 27 |
Journal | Journal of public economic theory |
Volume | 25 |
Issue number | 5 |
Publication status | Published - Oct 2023 |
Peer-reviewed | Yes |
External IDs
Scopus | 85153403532 |
---|---|
ORCID | /0000-0002-5071-7849/work/142250542 |
WOS | 000970230500001 |
Keywords
Research priority areas of TU Dresden
DFG Classification of Subject Areas according to Review Boards
ASJC Scopus subject areas
Keywords
- bargaining, delegation, incomplete information, opacity, public good provision, transparency, Transparency, Bargaining, Opacity, Incomplete information, Public good provision, Delegation