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上海高考英语考纲词汇表（注：带“*”为2019年新增词汇；加粗下划线的为2016年新增词汇；带“△”为2016年新增词汇）1◆A◆2 a (an) art. 一（个、件……）3 △abandon v. 舍弃，放弃4 ability n. 能力；才干5 able a. 能够的；有能力的678910111213141516171819202122232425262728293031323334353637 acquire v. 获得；学到38 across prep. 横过，穿过39 act n.法令，条例v.（戏）表演，扮演（角色），演出（戏）；行动，做事40 action n. 行动41 active a. 积极的，主动的42 activity n. 活动43 actor n. 男演员44 actress n. 女演员45 actual a. 实际的；现实的46 AD n. 公元47 ad (缩) =advertisement n .广告48 adapt v. （使）适应；（使）适合49 add vt. 添加，增加50 *addict vt. 使沉溺，使上瘾；n. 有瘾的人，入迷的人51 addition n. 增加；（算数用语）加52535455565758596061626364656667686970717273747576777879808182 afternoon n. 下午，午后83 afterwards ad. 后来84 again ad. 再一次；再，又85 against prep. 对着，反对86 age n. 年龄；时代87 aged a. 年老的，陈年的88 agency n. 代理；中介89 agent n. 代理人90 aggressive a. 侵略的；咄咄逼人的91 ago ad. 以前92 agree v. 同意；应允93 *agreeable a. 令人愉快的，惬意的94 Agreement n. 同意,一致; 协定,协议95 agricultural a. 农业的96 agriculture n. 农业，农学979899100101102103104105106107108109110111112113114115116117118119120121122123124125126127 always ad. 总是；一直；永远128 am v. be的人称形式之一129 a.m./am，A.M./AM n. 午前，上午130 amateur n. 业余爱好者 a. 业余爱好的131 amaze v. 惊奇，惊叹；震惊132 amazing a. 令人吃惊的133 ambition n. 野心，强烈愿望，志向134 ambulance n. 救护车135 America n. 美国；美洲136 among prep. 在……中间；在（三个以上）之间137 amount n.&v. 数量；总计138 amuse vt. （使人）快乐，逗乐139 △amusement n. 娱乐140 amusing a. 有趣的，逗乐的141 analyse（Analyze）v. 分析142143144145146147148149150151152153154155156157158 )答案159160161162163164165166167168169170171172 apartment n. （美）楼中单元房，一套房间；房间173 *ape n. 类人猿，模仿者vt. 模仿174 apologize vi. 道歉，谢罪175 apology n. 道歉176 *apparent a. 显然的177 appeal n.&v. 上诉；呼吁178 appear vi. 出现179 appearance n. 出现，露面；容貌180 appetite n. 食欲；嗜好181 applaud v. 喝彩；向…鼓掌182 applause n. 喝彩；鼓掌183 apple n. 苹果184 *appliance n. 器具185 *applicant n. 申请人186 application n. 申请（表），应用187188189190191192193194195196197198199200201202203204205206207208209210211212213214215216217218 as ad.& conj.像…一样;如同;因为prep. 作为，当做219 ash n. 灰；灰末220 ashamed a. 惭愧；害臊221 *aside ad. 在旁边，到一边222 Asia n. 亚洲223 Asian a.亚洲的，亚洲人的；n. 亚洲人224 ask v. 问,询问；请求,要求；邀请225 asleep a. 睡着的，熟睡226 aspect n. 方面227 aspirin n. 阿司匹林（药片）228 assemble v. 集合，召集，装配229 assess v. 评定，对…进行估价230 assist n. 帮助231 assistant n. 助手，助理232 associate v. 结合在一起，使有联系233234235236237238239240241242243244245246247248249250251252253254255256257258259260261262263264 avenue n. 林荫道，街265 average a. 平均的；普通的；n. 平均数266 avoid v. 避免，躲开，逃避267 await v. 等候，等待（处理）268 awake (awoke，awoken) v. 唤醒；a. 醒着的269 awaken v. 唤醒270 award n. 奖品，奖励271 aware a. 知道的；意识到的272 away ad. 离开；远离273 awful a. 可怕的；庄严的274 awkward a. 笨拙的275276 ◆B◆277 baby n. 婴儿278 bachelor n. 学士，单身汉279280281282283284285286287288289290291292293294295296297298299300301302303304305306307308309 baseball n. 棒球310 *basement n. 地下室311 basic a.基本的312 basin n. 洗脸盆，盆313 basis n. 基础，根据，原则314 basket n. 篮子，蒌，筐315 basketball n. 篮球316 bat n. 板，蝙蝠，球棒，球拍v.打，击317 bath n. 洗澡；浴室；澡盆318 bathe vi. 洗澡；游泳319 bathing n. 游泳，洗澡320 bathroom n. 浴室，盥洗室321 battery n. 电池322 battle n. 战斗；战役323 bay n. 海湾324325326327328329330331332333334335336337338339340341342343344345346347348349350351352353354 belong vi. 属，附属355 below prep. 在……下面356 belt n .（皮）带357 bench n. 长凳；工作台358 bend (bent，bent) vt. 使弯曲359 beneath prep. 在……下方（面）360 beneficial a. 有益的361 benefit n.&v. 利益；收益362 beside prep. 在……旁边；靠近363 besides prep.除……以外（还有）ad. 还有，此外364 best a. 最好的adv. 最好地，最365 bet v. 打赌366 better a. 较好的n. 好的人（东西）367 between prep. 在（两者）之间；在…中间368 beyond prep. 超越，在…的那边369370371372373374375376377378379380381382383384385386387388389390391392393394395396397398399400 blow (blew，blown) v. 吹；刮风；吹气401 blue n.蓝色；a. 蓝色的;悲伤的;沮丧的402 board n.木板；布告牌；委员会；（政府的）部；v. 上（船、火车、飞机）403 *boast vi. n. 自吹自擂vt. 吹嘘404 boat n. 小船，小舟405 body n. 身体406 boil v. 沸腾；烧开；煮……407 bomb n. 炸弹v. 轰炸408 bone n. 骨头，骨质409 book n.书；本子；v. 预定，定（房间、车票等）410 booklet n. 小册子411 bookshop n. 书店412 *boom v. 使兴旺，发隆隆声，急速发展n. 繁荣，钓竿，隆隆声413 boot n. 靴414415416417418419420421422423424425426427428429430431432433434435436437438439440441442443444445 breathe vi. 呼吸446 △breathless a. 气喘吁吁的，上气不接下气的447 *breed n.品种，种类448 *breeze n.微风449 *bribe n.贿赂v. 向…行贿450 brick n. 砖；砖块451 bride n. 新娘452 bridegroom n. 新郎453 bridge n. 桥454 brief a. 简洁的455 briefly ad. 简洁地，简短地456 *brigade n. (执行特定任务的)队457 bright a. 明亮的；聪明的458 brilliant a. 灿烂的，极聪明的，卓越的459 bring (brought，brought) vt. 拿来，带来，取来46046146263464465466467468469470471472473474475476477478479480481482483484485486487488489490 busy a. 忙（碌）的491 but conj.但是，可是；prep. 除了，除……外492 butcher n. & vt. 肉店；屠夫；屠宰（动物）；残杀（人）493 butter n. 黄油，奶油494 butterfly n. 蝴蝶495 button n.纽扣；（电铃等的）按钮；v. 扣（纽扣）496 buy(bought，bought)vt. 买497 by prep. 靠近，在…旁；在…时间；不迟于；被；用；由；乘（车）498 bye int. 再见499500 ◆C◆501 cabbage n. 卷心菜，洋白菜502 cabin n. 机舱，小木屋503 cable n. 缆，索 a. 有线电视的504 cafe n. 咖啡馆；餐馆505 cafeteria n. 自助餐厅506 cage n. 笼；鸟笼507 cake n. 蛋糕，糕点；饼508 calculate v. 计算；打算509 calculator n. 计算器510 calendar n. 日历511 call n.喊，叫；电话，通话；v. 称呼；呼唤；喊，叫512 calm a.镇静的；沉着的；v. 镇静；沉着513 camel n. 骆驼514 camera n. 照相机,摄影机,摄像机515 camp n.（夏令）营；vi. 野营；宿营516 campaign n.&v. 运动，战斗；作战，参加竞选，参加活动517 campus n. （大学）校园518 can 1 (could) modal v. 可能;能够;可以519 can't = can not 不能520 can 2 n. （美）罐头；罐子521 a garbage can （美）垃圾桶522 a can opener 开罐器523 canal n. 运河；水道524 cancel vt. 取消525 cancer n. 癌526 candidate n. 候选人527 candle n. 蜡烛528 candy n. 糖果529 *canteen n. 小卖部，食堂530 cap n. （无檐的或仅在前面有檐的）帽子；（瓶子的）盖；（钢笔等的）笔套531 capable a. 有能力的532 capital n. 首都,省会；大写；资本 a. 首都的，资本的，主要的533 capitalist n. n.资本家; 资本主义者; <口>有钱人，财主;adj资本主义的;资本家的; 有资本的534 △capsule n. [医]胶囊；[航]太空舱；小容器535 captain n. （海军）上校；船长，舰长；队长536 *capture n. v. 捕获，占领，俘获537 car n. 汽车，小卧车538 carbon n. 碳539 card n. 卡片540 care n.照料，保护；小心；v. 介意…，在乎；关心541 career n. 生涯，职业542 careful a. 小心的,仔细的,谨慎的543 careless a. 粗心的，漫不经心的544 cargo n. (由船、飞机、车辆装载的)货物545 carpenter n. 木匠546 carpet n. 地毯547 △carriage n. 四轮马车;（火车）客车厢548 carrot n. 胡萝卜549550551552553554555556557558559560561562563564565566567568569570571572573574575576577578579580 central a. 中心的,中央的;主要的581 centre (美center ) n. 中心，中央582 century n. 世纪，百年583 ceremony n. 典礼584 certain a. （未指明真实名称的）某…;确定的,无疑的;一定会…585 *certificate v. 发给证明书; 用证书证明n. 证明书; 文凭，结业证书586 chain n. 链；链条587 chair n. 椅子；(会议)主席588 chairman n. 主席，会长；议长589 chairwoman n. 女主席，女会长；女议长590 chalk n. 粉笔591 challenge n. 挑战(性) v. 向…挑战，提出挑战592 *champion n. 冠军 a. 得第一名的593 championship n. 锦标赛，冠军594 chance n. 机会，可能性，机遇595 change n.零钱；找头；. v 改变，变化；更换；兑换596 channel n. 频道；通道；水渠597 chapter n. 章598 character n. （汉）字，字体；品格，个性599 characteristic a. 特有的，独特的，n. 特性，特征600 charge v. 要求收费；索价；将(电池)充电n. 费用；价钱，控告601 *charity n. 慈善（行为）; 施舍，捐助; 慈善机关; 仁爱，宽容602 *charm n. 魅力; 魔力; 咒文;小装饰品vt. 使陶醉; 诱惑; 对…行魔法; 令人陶醉603 chart n. 图表；航海图604 *chase n. v. 追求; 追捕; 追寻; 镂刻605 chat n. & vi.聊天，闲谈606 cheap a. 便宜的，贱607 cheat n. & v. 骗取，哄骗；作弊608 check n.检查；批改；vt. 校对，核对；检查；批改609 checkout n. 付款台，结帐离开; 检验，校验610 cheek n. 面颊，脸蛋611 cheer n. & vi. 欢呼；喝彩612 cheese n. 奶酪613 chemical a. 化学的n. 化学品614 chemist n. 药剂师；化学家615 chemistry n. 化学616 cheque (美check) n. 支票617 chess n. 棋618 chest n. 箱子；盒子；胸部619 △chew v. 咀嚼，咬620 chicken n. 鸡；鸡肉621 chief a. 主要的；首要的；n. 领导，头622 child (复children) n. 孩子，儿童623 childbirth n. 分娩，生产624 childhood n. 幼年时代，童年625 childish a. 孩子般的，幼稚的626 *chill n. 寒冷，着凉 a. 冷的627 chimney n. 烟囱; 壁炉; 玻璃灯罩; 烟囱状东西628 china n. 瓷器629 chip n. 碎片，油煎土豆片，集成电路块，（计）芯片630 chocolate n. 巧克力631 choice n. 选择，抉择632 choke v. （使)窒息,呛；塞满,塞住633 choose (chose，chosen) vt. 选择634 *chop v. 砍，劈n. 排骨肉635 chopsticks n. 筷子636 Christian n. 基督教徒和天主教徒的总称637 Christmas n. 圣诞节638 church n. 教堂；教会639 cigar n. 雪茄烟640641642643644645646647648649650651652653654655656657658659660661662663664665666667668669670671 clock. n. 钟672 *clone. n. 无性繁殖，克隆v. 无性繁殖，复制673 close a.亲密的；近，靠近；ad. 近，靠近674 cloth n. 布675 clothes n. 衣服；各种衣物676 clothing n. (总称) 衣服677 cloud n. 云；云状物；阴影678 cloudy a. 多云的，阴天的679 club n. 俱乐部；纸牌中的梅花680 *clue. n. 线索，提示681 coach n. 教练；马车；长途车682 coal n. 煤；煤块683 coast n. 海岸；海滨684 coat n. 外套；涂层；表皮；皮毛v. 覆盖…的表面，给…涂上一层685 cock. n. 公鸡686 code. n. 密码687 coffee n. 咖啡688 coin n. 硬币689 coincidence n. 巧合，巧事；(意见、爱好等的)一致690 coke n. 可口可乐691 cold a. 冷的,寒的n.寒冷;感冒,伤风692 *collapse vi. 塌下，崩溃; 倒塌; 折叠; （尤指工作劳累后）坐下693 collar n. 衣领；硬领694 colleague n. 同事695 collect vt. 收集，搜集696 collection n. 收藏品，收集物697 college n. 学院；专科学校698 colony n. 殖民地969 colour (美color) n.颜色；vt. 给……着色，涂色700 column n. 专栏; 圆柱; 纵队，列701 comb n. 梳子v. 梳702 combination vt. 联合；结合，组合703 combine vt. 使联合；使结合704 come (came，come) vi. 来，来到705 *comedian n. 喜剧演员706 △comedy n. 喜剧；喜剧性；有趣的事情707 comfort n. 安慰；慰问708 comic a. 喜剧的；具有喜剧特点的；n. 喜剧演员，滑稽电影709 comfortable a. 舒服的；安逸的；舒服自在的710 command n. & v. 命令;指挥;掌握711 commander n. 司令员，指挥官712 comment n. 评论713 commerce n. 商业，贸易714 commercial a. 商业的，营利的n. 商业广告715 *commit v.犯罪，做错事; 把…托付给; 保证（做某事、遵守协议或遵从安排等）; 承诺，使…承担义务;716 commitment n. 承诺，保证；信奉，献身；承担的义务717 committee n. 委员会718 common a. 普通的,一般的;共有的719 communicate v. 交际；传达（感情，信息等）720 communication n. 交际;交往;通讯721 communism n. 共产主义722 communist n.共产主义者；a. 共产党的；共产主义的723 community n. 社区；团体724 companion n. 同伴；同事725 company n. 公司726 *comparative a. 相比较而言的，相对的727 compare vt. 比较，对照728 comparison n. 比较；比喻729 compass n. 罗盘，罗盘仪730 compete vi. 比赛，竞赛731732733734735736737738739740741742743744745746747748749750751752753754755756757758759760761 *conductor n. 售票员，列车员，指挥，导体762 conference n. (正式的)会议；讨论763 *confess v. 承认764 confidence n. 信任，信心765 confident a. 有信心的，自信的766 confirm v. 确认767 conflict n.&v. 冲突768 confuse v. 使混乱769 congratulate vt. 祝贺770 congratulation n. 祝贺，庆贺771 *congress n. 代表大会，立法机关772 connect vt. 连接，把…联系起来773 connection n. 连接物；接触，联系774 *conquer v. 击败，征服775 *conscience n. 良心776777778779780781782783784785786787788789790791792793794795796797798799800801802803804805806807 convenient a. 便利的，方便的808 conversation n. 谈话，交谈809 convey v. 传达，运输810 convince v. 使确信，信服，说服811 convincing a. 有说服力的;有力的812 cook n.炊事员，厨师；v. 烹调，做饭813 cooker n. 炊具814 cool a. 凉的，凉爽的；酷815 cooperate v. 合作，协作，配合816 cooperation n. 合作817 cope v. (with) 对付，对抗，（妥善地）处理818 copy n.抄本，副本；一本（份，册……）；v. 抄写；复印；（计算机用语）拷（备份盘）819 corn n. 玉米，谷物820 corner n. 角；角落；拐角821822823824825826827828829830831328338348358363783883984084142843844845486847848849850851852 credit n. 信用；信赖；信誉853 crew n. 全体人员854 crime n.&v. 罪行；控告855 criminal a.&n. 犯罪的；罪犯856 crisis n. (pl. crises) 决定性时刻，危机，转折点857 critic n. 批评家，评论家858 critical a. 关键的; 批评的，爱挑剔的; 严重的; 极重要的;评论的859 criticism n. 批评，批判860 criticize v. 批评，批判，指责，非难861 crop n. 庄稼；收成862 cross a. 脾气不好的，易怒的；n. 十字形的东西；vt. 越过；穿过863 crossroads n. 交叉路口864 crowd n. 人群vt. 拥挤，群聚865 crown n. 王冠，国王，王位866 cruel a. 残忍的，残酷的；无情的867868869870871872873874875876877878879880881882883884885886887888889890891892893894895896897 dam n. 水坝，堰堤898 damage n.& vt. 毁坏，损害899 △damp a. 湿的，潮湿的n.潮湿vt.使潮湿，使沮丧，抑制900 dance n.& vi. 跳舞901 danger n. 危险902 dangerous a. 危险的903 dare v.& aux. （后接不带to的不定式；主要用于疑问，否定或条件句）敢，敢于904 dark n.黑暗；暗处；日暮；a. 黑暗的；暗淡的；深色的905 darkness n.906 darling n. & a.907 dash v. & n. 快跑，冲刺，短跑，破折号，猛冲908 datum (pl. data) n. 资料，数据909 △database n. 资料库，数据库910911912913914915916917918919920921922923924925926927928929930931932933934935936937938939940941 define vt. 给…下定义942 definite a. 明确的，确定的943 definition n. 定义，释义944 degree n. 程度；度数；学位945 delay v.& n. 拖延，延误，延迟，延期；耽搁946 delegate n. 代表947 delete v. 擦去，删除948 *deliberate a. 深思熟虑的; 故意的; 蓄意的; 慎重的v.权衡，熟虑; 商讨949 *delicate a. 微妙的; 熟练的; 纤弱的; 易损的，雅致的950 delicious a. 美味的，可口的951 delight n. & v. (使)高兴；使人高兴的东西(或人)952 delighted a. 高兴的，快乐的953 deliver vt. 投递（信件，邮包等）954 delivery n. 投递，分送，询问955 demand vt. n. 要求，需要956 demanding a. 要求高的，费力的957 democracy n. 民主958 *demonstrate v. 证明，论证，展示，示威959 dense a. 密集的，稠密的; 浓密的，浓厚的; 愚钝的;960 dentist n. 牙科医生961 deny v. 否认，不承认；拒绝给予，拒绝要求962 depart vi. 离开，出发963 departure n. 离开964 depend vi. 依靠，依赖，指望；取决于965 dependent a. 依靠的，依赖的966 deposit vt. n. 储蓄; 寄存; 放置，安置; 付保证金,存款; 沉淀(物); 寄存967 depress vt. 压下，压低; 使沮丧; 使萧条; 使跌价，使不景气968 Dept.= department n. 部门，局969 depth n. 深，深度970 describe vt. 描写，叙述971 description n. 描述，描写972 desert 1 n. 沙漠973 desert 2 vt. 舍弃；遗弃974 deserve v. 应得975 design n.& vt. 设计，策划图案，图样，样式976 desire vt. & n. 要求；期望，愿望977 desk n. 书桌，写字台978 desktop n. 桌面，台式机 a. 台式的979 *despair n. vi. 失望，绝望980 △desperate a. （因绝望而）不惜冒险的，不顾一切的，拼命的981 despite prep.不管; 虽有; 尽管,不论982 dessert n.甜点; 餐后甜食983 destination n.目的，目标; 目的地，终点; [罕用语] 预定，指定984 destroy vt. 破坏，毁坏985 destruction n. 破坏，毁灭986 detail n. 细节987 △detective n. 侦探988 determination n. 决心,决定；确定989 determine vt. 决定；决心990 determined a. 下定决心的，有决心的991 develop v. （使）发展；（使）发达；(使)发育;开发vt.冲洗(照片) 992 development n. 发展，发达，发育，开发993 device vt. 设计，装置994 devote vt. 把…奉献；贡献995 devotion n. 奉献，奉献精神996 *diagnose vt. 诊断，断定997 dial vt. 拨（电话号码）n. 转盘，刻度盘，钟面998 dialect n. 方言，行话999 diagram n. 图表，图样1000 dialogue (美dialog) n. 对话1001 diamond n. 钻石，金刚石；纸牌中的方块10021003410010051006100710081009101010111012101310141015101610171018101910201021102210231024102526102710281029103010311032 disadvantage n. 不利条件；弱点1033 △disagree vi. 意见不一致，持不同意见1034 disagreeable a.不合意的，令人不快的1035 disagreement n. 意见不一致；相违；争论1036 disappear vi. 消失1037 disappoint v. 使失望1038 disappointed a. （感到）失望的1039 disapproval n. 不赞成，非难1040 disapprove v. 不赞成，不同意1041 disaster n. 灾难；祸患1042 disc n. 圆盘物，唱片，磁盘1043 *discipline v. 训练，训导，惩戒n. 纪律1044 disco n. 迪斯科舞（曲）1045 discount n. 折扣1046 *discourage vt. 阻止，阻拦1047 discover vt. 发现1048 discovery n. 发现1049 discuss vt. 讨论，议论1050 discussion n. 讨论，辩论1051 disease n. 病，疾病1052 dish n. 盘，碟；盘装菜；盘形物1053 dishwasher n. 洗碗机，洗碟工1054 dislike v. &n. 不喜欢，憎恶1055 dismiss vt. 让…离开；遣散；解散；解雇1056 disobey vt. 不服从，违抗1057 disorder n. vt. （身心机能）失调，混乱，凌乱; 动乱，骚乱; 不正当行为1058 disorderly a. 杂乱的; 凌乱的; 妨碍治安的; 无法无天的1059 display n. 展示1060 dissatisfy vt. 使不满意1061 *dissolve vi. 溶解1062 distance n. 距离1063 distant a. 远的，遥远的1064 *distinct a. 明显的，清楚的; 卓越的，不寻常的; 有区别的; 确切的1065 distinguish v. 区分，辨别，使表现突出1066 distinguished a. 卓越的，杰出的1067 distribute v. 分配；分散，把…分类1068 district n. 区；地区；区域1069 distrust v. n. 不信任，怀疑1070 disturb vt. 扰乱；打扰，使不安1071 disturbance n. 扰乱；打扰1072 dive vi. 跳水1073 diverse a. 不同的；多种多样的1074 divide vt. 分，划分;【数】除1075 division n. 区分，划分;部门，组，除法1076 *divorce v. n. 判…离婚，（与…）离婚1077 dizzy a. 头昏目眩的1078 do (did，done) v. & aux. 三单does 做，干（用以构成疑问句及否定句。
Ž.Econometrica,Vol.69,No.2March,2001,377᎐411COSTLY BARGAINING AND RENEGOTIATIONB Y L UCA A NDERLINI AND L EONARDO F ELLI1We identify the inefficiencies that arise when negotiation between two parties takes place in the presence of transaction costs.First,for some values of these costs it isefficient to reach an agreement but the unique equilibrium outcome is one in whichagreement is never reached.Secondly,even when there are equilibria in which anagreement is reached,wefind that the model always has an equilibrium in whichagreement is never reached,as well as equilibria in which agreement is delayed for anarbitrary length of time.Finally,the only way in which the parties can reach an agreement in equilibrium is byŽ.using inefficient punishments for some of the opponent’s deviations.We argue that thisimplies that,when the parties are given the opportunity to renegotiate out of theseinefficiencies,the only equilibrium outcome that survives is the one in which agreement isnever reached,regardless of the value of the transaction costs.K EYWORDS:Optional bargaining costs,inefficient bargaining outcomes,renegotiation, imperfect recall.1.INTRODUCTION1.1.Moti¨ationŽŽ..T HE C OASE T HEOREM Coase1960is one of the cornerstones of modern economic analysis.It shapes the way economists think about the efficiency or inefficiency of outcomes in most economic situations.It guarantees that,if property rights are fully allocated,economic agents will exhaust any mutual gains from trade.Fully informed rational agents,unless they are exogenously restricted in their bargaining opportunities,will ensure that there are no unexploited gains from trade.Ž.This view of the necessary exploitation of all possible gains from trade is at the center of modern economic analysis.Economists faced with an inefficient outcome of the negotiation between two rational agents will automatically look for reasons that impede full and frictionless bargaining between the agents.In this paper we focus on the impact of transaction costs on the Coase theorem.We show that,in a complete information world,transaction costs 1We are grateful to Vincent Crawford,Joseph Harrington,Roger Lagunoff,Eric Maskin, Matthew Jackson,Steven Matthews,Larry Samuelson,Ilya Segal,a co-editor and two anonymous referees for insightful comments.We would also like to thank seminar participants at Brown,Ž.Ž.Ž.Cambridge,CentER Tilburg,Ente Einaudi Rome,Erasmus Rotterdam,Essex,E.S.S.E.T.1999Ž.Gerzensee,Georgetown,John’s Hopkins,The London School of Economics,Northwestern,S.E.D.Ž.Ž.1999Alghero,S.I.T.E.1998Stanford,The Stockholm School of Economics,Tel-Aviv University, and the University of Venice for helpful discussions and feedback.The research work for this paper was carried out while we were visiting the Department of Economics at the University of Pennsylva-nia.We are grateful for their stimulating hospitality.Of course,we are solely responsible for anyŽ. remaining errors.We acknowledgefinancial support from the E.S.R.C.Grant R000237825.377378L.ANDERLINI AND L.FELLIimply that the Coase theorem no longer holds in the sense that an efficient outcome is no longer guaranteed.In the model that we analyze,for certain values of the transaction costs only inefficient equilibria are possible,while for other values of these costs both efficient and inefficient equilibria obtain.In the latter case wefind that it is not possible to select the efficient outcomes in a consistent way:there are no equilibria of the model that guarantee an efficient outcome in every subgame.Given the impossibility of selecting efficient outcomes byfiat,we proceed as follows.Keeping as given the friction introduced by the transaction costs,we expand the negotiation possibilities for the two agentsᎏwe build into the extensive form opportunities for the parties to break out of inefficient outcomes. Wefind that in this case the only equilibrium outcome that survives is the most inefficient possible one:agreement is never reached and the entire surplus fails to materialize.1.2.Costly BargainingOur point of departure is the leading extensive form model of negotiation between two parties,namely an alternating offers bargaining game with com-plete information with potentially infinitely many rounds of negotiation in whichŽŽ..2 the players discount the future at a strictly positive rate Rubinstein1982. We introduce transaction costs in the following way.Both parties,at each round of negotiation,must pay a positive cost to participate in that round of the bargaining game.At each round,both parties have a choice of whether or not to pay their respective participation costs.Each round of negotiation takes place only if both parties pay their participation costs.If either player decides not to pay,the negotiation is postponed until the next period.The interpretation of the participation costs that we favor is the following.AtŽthe beginning of each period,both parties must decide irrevocably for that .period whether to spend that period of time at the negotiation table,or to engage in some other activity that yields a positive payoff.The participation costs in our model can simply be thought of as these alternative payoffs that the agents forego in order to engage in the negotiation activity for that period. Obviously,the bargaining situations that our modelfits best are those in which the participation costs we have described are a prominent feature of the bargaining process.First of all,the alternative payoff that the parties can earn, although smaller,must be of the same order of magnitude as the potential payoff from a bargaining agreement.Secondly,the time necessary to carry out each round of bargaining cannot be negligible.Offers and counteroffers might involve intricate details of the transaction at hand that take time to describe, check,and verify.2Ž.Many of our arguments are based on modifications of the proof that the Rubinstein1982Ž.model has a unique subgame perfect equilibrium presented by Shaked and Sutton1984.COSTLY BARGAINING379 Thefirst sense in which the Coase theorem fails in our model is the following. There exist values of the participation costs such that it is efficient for theŽparties to reach an agreement the sum of the costs is strictly smaller than the .size of the surplus and yet the unique equilibrium of the game is for the partiesŽnever to pay the costs so that an agreement is never reached Theorems1and2 .below.Having established Theorems1and2below,we focus on the case in which the values of the participation costs are low enough so that the parties will be able to reach an agreement in equilibrium.In this case the model displays aŽ.Žwide variety of equilibria:efficient equilibria with immediate agreement The-.Ž.orem3below,inefficient equilibria with an agreement with an arbitrarily long Ž.Ž.delay Theorem4below,and inefficient equilibria in which an agreement is Ž.never reached Theorem1below.Therefore,the Coase theorem fails in this case too in the sense that it is no longer necessarily the case that the outcome of the bargaining between the parties is Pareto efficient.In the case in which the participation costs are such that there are both efficient and inefficient equilibria,a natural reaction is that it is just a matter of choosing the right selection criterion to be able to isolate the efficient equilibria. If this were possible one would conclude that,in a sense,the Coase theorem does not fail in this setting for low enough transaction costs.In Section5below, we show that this way of proceeding does not work in our model.The reason is that all equilibrium agreements are sustained by off-the-equilibrium-path inef-ficient continuation equilibria needed to punish the players for not paying their participation costs.Since all efficient equilibria must clearly prescribe that an agreement takes place,it follows that a selection criterion that implies efficiency in a consistent way across every subgame does not work in our set-up.In fact, the set of equilibria that survives any such selection criterion is empty in our Ž.model Theorem6below.The fact that inefficient equilibrium outcomes are possible in our model leads naturally to the question of whether the source of the inefficiency and the failure of the Coase theorem lies in the limited negotiation opportunities given to the parties.To address this question we proceed in the following way.We modify the extensive form of the game so as to allow the parties a chance to start a fresh negotiation whenever they are playing strategies that put them strictly within the Pareto frontier of their payoffs.We do this by modifying the extensive form of the game and transforming it into a game of imperfect recall. We assume that,at the beginning of each period,with strictly positive probabil-ity,the parties do not recall the past history of play.This affords them a chance to renegotiate out of inefficient punishments.The result is devastating for the equilibria in which agreement is reached.When the probability of forgetting theŽ.history of play is above a minimum threshold smaller than one,the unique equilibrium outcome of the modified game is for the parties never to pay the costs and therefore never to reach an agreement.This is true regardless of the size of the participation costs,provided of course that they are positive.380L.ANDERLINI AND L.FELLIWe view this as the most serious failure of the Coase theorem in our model.If one expands the parties’opportunities to bargain,the inefficiency becomes extreme.Agreement is never reached,whatever the size of the transaction costs.1.3.Related LiteratureAs we mentioned above,the inefficiency results that we obtain in this paper can be viewed as a failure of the Coase theorem in the presence of transaction costs.3ŽŽ.. It is clear that the original version of the Coase theorem Coase1960 explicitly assumes the absence of any transaction costs or other frictions in theŽ.bargaining process.Indeed,Coase1992describes the theorem as a provocative result that was meant to show how unrealistic is the world without transaction costs.4It should,however,be noticed that,sometimes,subsequent interpreta-tions of the original claim have strengthened it way beyond the realm of frictionless negotiation.5It does not seem uncommon for standard microeco-nomics undergraduate texts to suggest that the Coase theorem should hold in the presence of transaction costs.6Ž.The analysis in Anderlini and Felli1997is also concerned with the hold-up problem generated by ex-ante contractual costs in a stylized contracting model and with the inefficiencies it generates.However,the main concern in Anderlini Ž.and Felli1997is with the robustness of the inefficiencies to changes in a number of assumptions.In particular,that paper focuses on the nature of the costs payable by the parties to make the contracting stage feasible,and on the possibility that the parties may rely on an expanded contract that includes contracting on the ex-ante costs themselves.By converse,in this paper we take it as given that the parties bargain according to a given protocol,and that they have to pay their participation costs in order to negotiate at each round.3We are certainly not thefirst to point out that the Coase theorem no longer holds when there are frictions in the bargaining process.There is a vast literature on bargaining models where the frictions take the form of incomplete and asymmetric information.With incomplete information,Žefficient agreements often cannot be reached and delays in bargaining may obtain.See Muthoo Ž.1999for an up-to-date coverage as well as extensive references on this strand of literature and.other issues in bargaining theory.By contrast,the main bargaining game that we analyze here is one of complete information.The source of inefficiencies in this paper can therefore be traced directly to the presence of participation costs.4Ž.de Meza1988provides an extensive survey of the literature on the Coase theorem,including an outline of its history and possible interpretations.5Ž.By contrast,Dixit and Olson1997have recently been concerned with a classical Coasian publicŽ.good problem in which they explicitly model the agents’ex-ante possibly costly decisions of whether to participate or not in the bargaining process.In this context,theyfind both efficient andŽ.inefficient equilibria.They also highlight the inefficiency of the symmetric mixed-strategy equilibria of their model.6For instance,an excellent textbook widely in use in the U.S.and elsewhere claims that,in its strongest formulation,the Coase theorem is interpreted as guaranteeing an efficient outcomew xŽŽwhenever the potential mutual gains‘‘exceed the necessary bargaining costs’’Nicholson1989, ..p.726.COSTLY BARGAINING381 Because they are sunk by the time offers are made and accepted or rejected, the participation costs that we introduce in the bargaining problem generate a version of the hold-up problem.This is the main source of inefficiency in the models that we analyze in this paper.The need for relationship-specific investment may allow one party to hold-upŽthe other when fully contingent contracts are not available Klein,Crawford,Ž.Ž.Ž.and Alchian1978,Grout1984,Williamson1985,Grossman and Hart Ž..1986.This key observation has generated a large and varied literature that has shed light on many central issues ranging from vertical and lateral integration ŽŽ..ŽŽ.. Grossman and Hart1986,ownership rights Hart and Moore1990,theŽŽ..Ždelegation of authority Aghion and Tirole1997and power Rajan and Ž..Zingales1998withinfirms.In all these models,a hold-up problem arises because the only possible contracts are incomplete.In a sense this causality is reversed in this paper.Here,the hold-up problem generated by the participation costs may induce inefficient bargaining outcomes;in some cases it may prevent the parties from reaching an agreement at all.The lack of agreement in a bargaining problem,in turn,can be viewed as an extreme form of contractual incompleteness.In a way,it is the hold-up problem generated by the participa-tion costs that is the cause of contractual incompleteness rather than vice-versa: the parties do not sign a contract when in fact it would be efficient to do so.A small number of recent papers has been concerned with inefficiencies that might arise in bargaining models with complete information.The extensive form games,and hence the sources of inefficiencies,that they analyze are substan-Ž.tially different from ours.In Fernandez and Glazer1991and Busch and Wen Ž.1995the nature of the bargaining costs is the exact opposite to the one tackled here.The parties may choose to pay a cost to delay the negotiation for a period. They bothfind efficient and inefficient equilibria in their models.Fershtman and Ž.Seidmann1993analyze a bargaining model in which inefficient equilibria arise because of the nonstationarity of the game.The nonstationarity of their game is given by the presence of a deadline and by the fact that each party cannotŽ.accept an offer that he has rejected in the past.Riedl1997analyzes a model in which only one player incurs a cost to participate in the bargaining process.He concentrates on the comparison of the case in which the cost is payable once with the case in which a cost is payable in each period.1.4.O¨er¨iewThe paper is organized as follows.In Section2we describe in detail our model of alternating offers bargaining with transaction costs.Section3contains ourfirst inefficiency result and a characterization of the equilibria of the model described in Section 2.In Section4we investigate the robustness of the inefficient and of the efficient equilibria of our model to some basic changes in the description of the game.In Section5we show that it is impossible to select the Pareto efficient equilibria of our game in a way that is consistent across subgames.Section6contains our model of renegotiation opportunities in the382L.ANDERLINI AND L.FELLIextensive form.Here,we present our second main resultᎏnamely the fact that the only equilibrium outcome of our game of imperfect recall is that agreement is never reached.Section7briefly concludes the paper.For ease of exposition all proofs are relegated to the Appendix.2.THE MODELÄ4 We consider a bargaining game between two players indexed by i g A,B. The game consists of potentially infinitely many rounds of alternating offers n s1,2,...and the size of the surplus to be split between the players is normalized to one.Each player i has to pay a participation cost at round n Ž.denoted c constant through time.We interpret this cost as the opportunity icost to player i of the time the player has to spend in the next round ofbargaining.7Throughout the paper,we focus on the case in which c q c F1.A BIn all odd periods,n s1,3,5,...,player A has the chance to make offers,and player B the chance to respond.In all even periods n s2,4,6,...,the players’roles are reversed,B is the proposer,while A is the responder.We refer to the odd periods as A periods and to even periods as B periods.The size of the surplus to be split between the players is normalized to one.w xAny offer made in period n is denoted by x g0,1.This denotes A’s share of the pie,if agreement is reached in period n.The discount factor of player Ä4w.i g A,B is denoted by␦g0,1.iTo clarify the structure of each round of bargaining,it is convenient to divide each time period in three stages.In stage I of period n,both players decidesimultaneously and independently,whether to pay the costs c.If both playersipay their participation costs,then the game moves to stage II of period n.At the end of stage I,both players observe whether or not the other player has paid his participation cost.If one,or both,players do not pay their cost,then the game moves directly to stage I of period n q1.w xIn stage II of period n,if n is odd,A makes an offer x g0,1to B,that B observes immediately after it is made.At the end of stage II of period n,the game moves automatically to stage III of period n.If n is even,the players’roles in stage II are reversed.In stage III of period n,if n is odd,B decides whether to accept or reject A’s offer.If B accepts,the game terminates,and the players receive the payoffs Ž.described in1below.If B rejects A’s offer,then the game moves to stage I of period n q1.If n is even,the players’roles in stage III are reversed.7Of course,it is possible that as the parties progress into further rounds of bargaining,they may become more efficient in their use of time.Depending on the particular bargaining situation at hand,offers and counteroffers may become routine,and the time needed for each round of bargaining may shrink.Clearly in this case,the participation costs would be decreasing rather thanŽ. constant through time.Ourfirst inefficiency result below the only if part of Theorem2appliesŽ.unchanged if we consider the lower bounds over time of any time-dependent participation costs.COSTLY BARGAINING383ŽThe players’payoffs consist of their shares of the pie zero if agreement is .never reached,minus any costs paid,appropriately discounted.To describe the payoffs formally,it is convenient to introduce some further notation at this Ž.point.Let,be a pair of strategies for the two players in the game weA BŽ.have just described,and consider the outcome path O,that these strate-A B8Ž.gies induce.Let also C,be the total of participation costs that player ii A BŽ.pays along the entire outcome path O,,discounted at the appropriateA Brate.Ž.If the outcome path O,prescribes that the players agree on an offer xA Bin period n,then the payoffs to A and B are respectively given byŽ.nŽ.⌸,s␦x y C,andA AB A A A BŽ.1Ž.nŽ.Ž.⌸,s␦1y x y C,B A B B B A BŽ.while if the outcome path O,prescribes that the players never agree onA BÄ4an offer,then the payoff to player i g A,B is given byŽ.Ž.⌸,sy C,.i A B i A B3.SUBGAME PERFECT EQUILIBRIAIn this section we provide a full characterization of the set of subgame perfect equilibria of the alternating offer bargaining game described in Section2above. Wefirst show that the bargaining game always has a subgame perfect Ž.equilibrium henceforth SPE in which the players do not ever pay the costs and hence agreement is never reached.By construction,this can be proved consider-ing the following pair of strategies that constitute an SPE of the game.Both players do not pay their participation costs in stage I of any period,regardless ofŽ. the previous history of play.In stage II of any period off the equilibrium path the proposing player demands the entire pie for himself.In stage III of any Ž.period again off the equilibrium path the responding player accepts any offer w xx g0,1.Thus,we have proved ourfirst result.T HEOREM1:Consider the alternating offers bargaining game with participationÄ4 costs described in Section2.Whate¨er the¨alues of␦and c for i g A,B,therei iexists an SPE of the game in which neither player pays his participation cost in any period,and therefore an agreement is ne¨er reached.We now proceed to characterize the necessary and sufficient conditions on Ž.Ž.the pair of costs c,c and the parties’discount factors␦,␦under whichA B A Bthe parties are able to achieve an agreement.8Throughout the paper,we focus on pure strategies only.This greatly simplifies the analysis and dramatically reduces the amount of notation we need.The nature of our results would be unaffectedŽby considering equilibria in which players are allowed independent randomizations behavioral .Žstrategies.In particular,the analogues of Theorems2and5below hold when mixing behavioral .strategies is allowed.L .ANDERLINI AND L .FELLI 384F IGURE 1.ᎏSPE with agreement in finite time.T HEOREM 2:Consider the alternating offers bargaining game with participation costs described in Section 2.The game has an SPE in which an agreement is Ä4reached in finite time if and only if ␦and c for i g A ,B satisfyi i Ž.Ž.Ž.2␦1y c y c G c and ␦1y c y c G c .A AB A B A B B Ž.For given ␦and ␦,the set of costs c ,c for which an agreement is A B A B reached is represented by the shaded region in Figure 1.A complete proof of Theorem 2appears in the Appendix.It is useful to Ž.outline here the steps of the argument that proves that the inequalities in 2are necessary for the existence of an SPE with agreement in finite time.Assume that an SPE with an agreement in finite time exists.Clearly,in any w x SPE the equilibrium agreement must satisfy x g c ,1y c .This is because the A B parties’payoffs cannot be negative in any SPE.9From the stationarity of the game it follows that if an SPE with agreement in finite time exists,then there must be some SPE with immediate agreement in every subgame starting in stage I of every period.Consider now stage III of a period in which the costs have been paid and B has made an offer to A .Clearly A will accept all offers x that are aboveŽH .H ␦x y c ,where x is the highest possible equilibrium agreement in a period A A A A in which A is the ing subgame perfection we can now conclude that the highest possible equilibrium agreement in a period in which B is theproposer,x H ,satisfiesB Ž.H ŽH .3x F ␦x y c .B A A A A completely symmetric argument proves thatŽ.L ŽL .41y x F ␦1y x y c A B B B 9This is immediate from the fact that each player can guarantee a payoff of zero by never paying his participation cost.COSTLY BARGAINING385 LŽL.where x respectively x is the lowest possible equilibrium agreement in aA BŽ.period in which A respectively B is the proposer.w x Recall now that all equilibrium agreements must be in the range c,1y c.A B Therefore,we can now substitute x H G c,x H F1y c,x L F1y c,and x L GB A A B A B BŽ.Ž.Ž.c into3and4to obtain the inequalities in2,and hence conclude the Aargument.Clearly,Theorem2supports ourfirst inefficiency claim.The sum of the participation costs is less than the total available surplus anywhere below the dashed line in Figure1.Given any pair of discount factors,there exists a region of possible participation costs such that the model has a unique,inefficient,SPEŽ.outcome.In Figure1,for any pair c,c below the dashed line but outside theA Bshaded area,the participation costs add up to less than one,but no agreement is ever reached.We are now ready to give a more detailed characterization of the SPE with agreements of this game.We start by identifying the range of possible equilib-rium shares of the pie in every possible subgame when agreement is immediate. T HEOREM3:Consider the alternating offers bargaining game with participationÄ4costs described in Section2,and assume that␦and c for i g A,B are such thati iŽ.2holds so that the game has some SPE in which an agreement is reached infiniteŽtime.Consider any subgame starting in stage I of any A period the A subgames .10from now on.Then there exists an SPE of the A subgames in which x is agreedA immediately,if and only ifŽ.wŽ.x5x g1y␦1y c y c,1y c.A B A B BŽSymmetrically,consider any subgame starting in stage I of any B period the B.subgames from now on.Then there exists an SPE of the B subgames in which x isB agreed immediately,if and only ifŽ.wŽ.x6x g c,␦1y c y c.B A A A BOur next result both completes our characterization of the set of SPE payoffs, and supports our second inefficiency claim.Every sharing of the pie that can be supported as an immediate agreement can also take place with a delay of an arbitrary number of periods.T HEOREM4:Consider the alternating offers bargaining game with participationÄ4costs described in Section2,and assume that␦and c for i g A,B are such thati iŽ.2holds so that the game has some SPE in which an agreement is reached infinite time.Ž.Let any x as in5and any odd number n be gi¨en.Then there exists an SPE of AŽ.the A subgames in which the continuation payoffs to the players are respecti¨ely gi¨en byŽ.nŽ.nŽ.7⌸s␦x y c,⌸s␦1y x y c.A A A AB B A B10Recall that we refer to all odd periods as A periods,and to all even periods as B periods.386L.ANDERLINI AND L.FELLIŽ.Moreo¨er,let any x as in6and any e¨en number n be gi¨en.Then there exists an BŽ.SPE of the A subgames in which the continuation payoffs to the players are respecti¨ely gi¨en byŽ.nŽ.nŽ.8⌸s␦x y c,⌸s␦1y x y c.A AB A B B B BŽ.Symmetrically,let any x as in6and any odd number n be gi¨en.Then thereBŽ.exists an SPE of the B subgames in which the continuation payoffs to the players Ž.Ž.are as in8.Moreo¨er,let any x as in5and any e¨en number n be gi¨en.ThenAŽ.there exists an SPE of the B subgames in which the continuation payoffs to the Ž.players are as in7.4.ROBUSTNESS OF EQUILIBRIAIn this section,we carry out four robustness exercises about the SPE of the game described in Section2that we have identified in Section3.Ourfirst concern is the relationship between the set of SPE of our game withŽŽ..˚the set of SPE of afinite version of the same game Stahl1972.The uniqueŽ.SPE identified by Rubinstein1982of the same bargaining game when there are no participation costs has many reassuring properties.Among these is the fact that if a version of the same game with a truncated time horizon is considered,the limit of the SPE of thefinite games coincides with the unique SPE of the infinite horizon game.This is not the case in our bargaining model with participation costs.In fact when we truncate the time horizon to befinite in our model,the only possible SPE outcome is the one in which neither player ever pays his participation cost and hence no agreement is reached provided only that participation costs are positive.The intuition behind Remark1below is a familiar backward induction argument.No agreement is possible in the last period since the responder would have to get a share of zero if agreement is reached,and therefore he will not pay his participation cost in that period.This easily implies that no agreement is possible in the last period but one,and so on.Let⌫ϱrepresent the infinite horizon alternating offers bargaining game with participation costs described in Section2.For anyfinite N)1,let⌫N repre-sent the same game with time horizon truncated at N.In other words,in⌫N,if period N is ever reached,the game terminates,regardless of whether an agreement has been reached or not.If no agreement has been reached by period N,the players’payoffs are zero,minus any costs paid of course.We can then state the following.R EMARK1:Let anyfinite N G1be gi¨en.Then the unique SPE outcome of⌫N is that neither player pays his participation cost in any period and hence agreement is ne¨er reached.。
