SBE - RCUK: Sequential Bargaining with Externalities

Princeton University, Princeton NJ

Investigators

Abstract

This award funds research in economic theory that builds new models of how individuals participate in groups that provide public goods and carry out joint projects. These models will give us new methods to study a variety of different applications. They can be used to study how individuals participate in a collective effort to create open-source software, how creditors bargain over bankruptcy restructuring, how non-profit leaders can raise funds for an organization with multiple goals, and how people make decisions to adopt new technologies. The project could result in better ideas for how to best coordinate individual efforts and contributions to advance important team goals. The research studies sequential contributions to public goods and joint projects in environments with transactional frictions. The first component focuses on the presence of a principal as a source of coordination for the completion of a single public good or collective agreement. The analysis considers the effect on outcomes and welfare of strengthening the formal bargaining power of agents relative to the principal. The second component studies sequential contributions to competing public goods in a fully decentralized environment without a principal. The team studies efficiency, delay, and the optimal organization of tasks and teamwork. The third component introduces a principal into the multiple joint projects environment. The researchers study how principals actively manage the intertemporal externalities generated by multiple projects. Students will benefit from participating in the project through exploring the results of the models under alternative assumptions and aiding in the numerical computations. This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.