Zoom webinar link.

The novelty of this paper is to investigate bargaining games where not only the status-quo can be (fully/partially) endogenous but parties can also affect the size of the future surplus (via investment). We show that there can be phases of both over- and under-investment under a fully endogenous status-quo. Moreover, players agree to invest more when they are sufficiently patient and investment is not endogenous. Instead, with pronounced asymmetries, both farsighted and shortsighted parties invest more when investment is endogenous. We study the impact of capital depreciation, asymmetry in parties’ patience and status-quo on the equilibrium.