Common Contracts
1 similar Conservation Agreements contracts
Conservation Agreements:Conservation Agreements • August 7th, 2017
This analysis pertains only to the parties’ joint value. If at the beginning of the entire game, the parties negotiate subject to an exogenously fixed disagreement point (such as the “business as usual” Nash equilibrium of the stage game), then the NGO’s shared interest in the Community having bargaining power is tempered by the fact that the initial share of surplus is sensitive to the parties’ relative bargaining weights. To be more precise, as a thought exercise let us start by imagining πC = 0 and πN = 1. In this case, cooperation is not possible and so the parties are stuck with repeated selection of the stage-game Nash profile ER.10 If we imagine raising πC from 0 (and correspondingly lowering πN from 1), then the attainable joint value increases; even though the NGO’s share of surplus goes down, both the NGO and the Community are better off. But when πC becomes large, although the joint value continues to rise, the NGO’s selected equilibrium payoff from the beginning of the game
