Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/296921 
Authors: 
Year of Publication: 
2022
Series/Report no.: 
Memorandum No. 05/2022
Publisher: 
University of Oslo, Department of Economics, Oslo
Abstract: 
Inspired by the negotiations leading up to the Paris Agreement on climate change, I study a bargaining game where every party is proposing only its own contribution, before the set of pledges must be unanimously approved. I show that, with uncertain tolerance for delay, each equilibrium pledge maximizes an asymmetric Nash product. The weights on othersí payoffs increase in the uncertainty, but decrease in the correlation of the shocks. The weights vary pledge to pledge, and this implies that the outcome is generically inefficient. The Nash demand game and its mapping to the Nash bargaining solution follow as a limiting case. The model sheds light on the Paris climate change agreement, but it also applies to negotiations between policymakers or business partners that have differentiated responsibilities or expertise.
Subjects: 
Bargaining games
the Nash program
JEL: 
C78
D78
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.