INTRANSIGENCE IN NEGOTIATIONS - THE DYNAMICS OF DISAGREEMENT

Three-party negotiations are analyzed in which the players are able no t only to rank alternatives but also have a preference for impasse. In a dynamic model, players progressively invoke fallback positions to t ry to prevent inferior outcomes from being implemented in a game of in complete information. A player's intransigence, or unwillingness to re treat to fallback positions, generally works to his or her advantage. Greater size-or, equivalently, an enhanced ability to effect preferred outcomes-also helps, but intransigence is a potent force by itself. I n fact, intransigence may prevail despite the fact that there is a so- called Condorcet alternative that could defeat it and all other altern atives. The analysis illuminates the rational basis of disagreement an d why it develops in the manner it does. Extensions of the dynamic mod el are discussed, including making the preferences of the players for impasse endogenous.