Strategic Effects and Incentives in Multi-issue Bargaining Games

if δ₂ >δ₁ (δ₂ <δ₁ respectively);

3)if λ1 increases, x1 increases, v1 increases and v2 decreases;

4) if δ₁ increases, v₁ increases (decreases) if

(1 + α₂λ₂)δ₂λ₁(1 - δ₁δ₂) + (α₁ - α₂λ₁λ₂)(1 - δ²₂ + δ₂ (δ₁ - δ₂)) > 0(< 0 respect.) (14)

while v₂ decreases (increases) if

-(1 + α2λ2)λ1(1 - δ1δ2) - 2(δ1 - δ2)(α1 - α2λ1λ2) < 0(> 0 respect.) (15)

5) if δ2 increases v1 decreases (increases) if

[2(δ1 - δ2)(α2λ1λ2 - α1) - (1 - δ1δ2)(λ1 + α1)] < 0(> 0 respect.) (16)

while v2 increases (decreases) if

(α1 + λ1)(1 - δ1δ2) + (α1 - α2λ1λ2)(δ1 - δ2 - δ2(1 - δ²₁)) > 0(< 0 respect.) (17)

The equilibrium outcome defined in Proposition 1, part 3, is characterised by the
following:

6) if α1 increases, v1 increases while xe1 and v2 remain unchanged;

7) if α₂ (or λ₂) increases, xe₁ , v₁ and v₂ increase;

8)if λ1 increases, v1 increases, while v2 and xe1 remain unchanged;

9) if δ₁ increases, xe₁ and v₂ decrease, while v₁ increases (decreases) if

α₁ - α₂λ₁λ₂ (1 - δ²₂) > 0(< 0 respect.)                    (18)

11

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