The importance of the agenda in bargaining

This paper discusses a multi-issue bargaining game in which the players set up an agenda and negotiate on the issues sequentially according to this agenda. We demonstrate that the agenda might play an important role in the bargaining and discuss the relationship between the agenda and the final outcome of the bargaining game. Assuming that players have conflicting evaluations regarding the importance of the issues under negotiation, we identify the type of agenda each player prefers. We also show that in such cases the outcome of the bargaining game need not to be efficient. By demonstrating the strategic use of the agenda the paper explains the phenomenon of "bargaining on the agenda".