that player 1 is indifferent between accepting and rejecting this offer so as to demand
for the entire surplus:
e l' (1 — αδ2)(1 + λ) — δ(1 — α) λ(1 — α)
(59)
ag2 y2 = ∆→o 1 + αδ = 1 + α
On the other hand, if λ > 1, player 2 demands y2 = 1 while player 1 demands a share
equal to ag2 xe1 where ag2 xe1 is such that player 2 is indifferent between accepting and
rejecting this offer so as to demand for the entire surplus:
1e, = lim(1 - αδ2)(1 + λ)- δλ(1 - α)
1 — α
(1 + α)λ
(60)
ag2 ∆→0 (1 + αδ)λ
We can now show that when there is a difficult/urgent issue, parties prefer to
postpone it and to agree over the easy issue first, even if this is not very important.
Proposition 6 When there is a difficult/urgent issue, parties can only agree in post-
poning such an issue regardless of its importance.
Proof. Let’s assume α> 1/3, given the SPE demands in Agenda 1, we distinguish
5 cases:
A) Let 0 < λ < λGR, where λGr = Vα(1+α) -α, in this case in agenda 1 Player
1 demands (2+λ)2(1~α), while in Agenda 2 player 1 obtains the entire surplus. In this
case player 1 obtains a larger payoff inagenda1ifλ is sufficiently large (at the
limit λ > λYe with λYe = α(1+a)~1+√√2-~a,~2a +a +a ), otherwise, he prefers agenda 2.
30
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