A note on multi-issue bargaining with a finite set of alternatives

Abstract

We extend the results of van Damme et al. (1990) and Muthoo (1991) to two bilateral multi-issue bargaining procedures with complete information and endogenous agenda, where each issue is associated with a finite set of alternatives. We show that in the first procedure (issue-by-issue bargaining), the stationary subgame perfect equilibria alone may support a large multiplicity of inefficient agreements. Confronting a recent study, the results for the second procedure imply that it is not necessary to appeal to "strictly controversial" issues in a bargaining problem in order to find multiplicity and delay in agreements.