Accessible Requires Authentication Published by De Gruyter July 25, 2017

How Status Seeking may Prevent Coasean Bargaining

Gilles Grolleau, Alain Marciano and Naoufel Mzoughi
From the journal Review of Law & Economics

Abstract

Even in a world with zero transaction costs, status seeking can prevent efficient Coasean bargaining. Using simple illustrations and various examples, we show that ignoring this impediment can explain the failure of some negotiations where an efficient bargain seems a priori reachable and expected. Rather than just emphasizing this neglected issue, we discuss various institutional and behavioral strategies by which this impediment can be overcome and even strategically used in socially desirable directions, such as bargaining over status.

JEL Classification: D62; D74; K10

Acknowledgements

We thank Elias Khalil and Laura McCann for comments on a previous version of the paper. We also thank the referees for their comments.

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Published Online: 2017-07-25

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