Strategic Effects and Incentives in Multi-issue Bargaining Games

Similarly player 2 prefers agenda 1 when λ is sufficiently large (at the limit λ>λ_Re

with λR_e = ^αα1(++α-) 1 ), otherwise, he prefers agenda 2. Since in this case λ cannot be
larger than λ_GR , then both players prefer agenda 2 if 0<λ<min {λ_{Y e}, λ_Re, λ_GR}
(see fig. 1) otherwise players have different preferences over agendas.

Agreement arises only for 0 <λ<min {λYe,λRe,λGR}

B) Let λB < λ < 1, with λB = VEII+")—^α, then Player 1 demands x₁ as in (55)

while in Agenda 2 player 1 obtains the entire surplus. Player 1 prefers agenda 1 if
λ > λG with λG = -(1 — a) + 2+ + a² and agenda 2 otherwise, while Player 2 always

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