Bargaining on behalf of a constituency (Q1581189)

The author considers a 2-stage bargaining game. On one side of the bargaining is a constituency, represented by an agent; on the other side, an adversary. After the first stage of bargaining, the constituency can retain or replace the agent. In general, a continuum of sequential equilibria exists for this game. The paper considers a strong refinement of sequential equilibrium, then characterizes the equilibria that survive refinement. The equilibria most likely to be played display considerable inefficiency, which takes the form of delayed agreement. The paper includes an application to the labor-management negotiations, including the bitter UAW strike of 1945-46.