Collective Hold Up

Santiago Oliveros (University of Essex) presents to NICEP on 9 November.

Santiago  is a theorist with interests in the area of voting and legislative bargaining. His work has been published in leading journals such as The American Economic Review, Econometrica and Economic Journal among others.

'Collective Hold Up' is in collaboration with Matias Iaryczower (Princeton University). 

Abstract

We consider a dynamic process of coalition formation in which a principal bargains sequentially with a group of agents. We show that when the principal's willingness to pay is sufficiently high, redistributing bargaining power from the principal to the agents generates inefficient delay and reduces agents' welfare. This occurs in spite of the lack of informational asymmetries or discriminatory offers. The reason for this inefficiency is a collective hold-up problem generated by the fact that agents bargaining later in the process can extract more resources from the principal.