bargaining power

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The ability to obtain a large share of the possible joint benefits to be derived from any agreement. Bargaining power is partly dependent on the losses that failure to agree is likely to cause to the various parties to a negotiation. In the absence of agreement, each party has a fall-back position: the less uncomfortable this is, and the longer any party can afford to stay in it, the stronger is their bargaining power. A party with a very uncomfortable fall-back position and an urgent need for an agreement has very little bargaining power. Bargaining power is increased by unity, financial reserves, and a reputation for toughness, and is decreased by division, shaky finances, and a reputation for being willing to compromise. See also bargaining.

Subjects: Economics — Law.

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