ISyE Seminar Series: Jorge Ramos-Mercado

Jorge Ramos-Mercado

"Reasons for Peace: Negotiations and the Holding Principle"

Presentation by Jorge Ramos-Mercado
PhD Candidate, Department of Economics
University of Minnesota

3:30 pm - Seminar
4:30 pm - Reception, snacks and beverages

About the seminar:

In the standard reputational-bargaining model (Abreu and Gul 2000), two strategic, impatient players reach agreements in finite time. I extend their setting by adding hidden effort to preserve a declining surplus. This extension accounts for negotiations ending without agreement despite multiple rounds of bargaining. Even when effort is not very costly, players exert low effort in expectation that their opponent appropriates an out-sized share of the surplus. Hence, the surplus may be destroyed before players reach an agreement.  I, nonetheless, find that the risk of surplus destruction improves the expected bargaining outcomes, because observing the endogenously determined surplus minimizes strategic delay. This model is further consistent with the 27 percentage point decline, since 1914, in the share of wartime negotiations effectively concluding wars.


Negotiations and the Holding Principle (PDF)


Jorge David Ramos-Mercado is a PhD candidate in the Department of Economics at the University of Minnesota—Twin Cities. He is a microeconomist who studies the role of dynamic learning in applied game theory and market design. His previous work finds applications ranging from art auctions, wartime diplomacy, and fiscal policy determination. Prior to going to graduate school, Jorge worked at the Center for Retirement Research at Boston College where he studied late career changes over time and changes in mortality inequality by race and socio-economic status. Lastly, he was born in San Juan, Puerto Rico but has lived all over the United States.

Start date
Wednesday, Nov. 2, 2022, 3:30 p.m.
End date
Wednesday, Nov. 2, 2022, 5:30 p.m.