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Reference Functions and Balanced Concessions in Bargaining

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Author Info
Nejat Anbarci

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Abstract

In bargaining, agents expect their concessions to be reciprocated. Using the 'reference function' concept of W. Thomson (1981), this paper constructs a class of solutions the outcomes of which lead to balanced concessions by agents as prescribed by the reference function adopted. The Kalai/Smorodinsky (1975) solution arises as a special case. Another solution in this class, which depends on the entire feasible set, is generated by using the center of gravity as the reference function.

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Publisher Info
Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 28 (1995)
Issue (Month): 3 (August)
Pages: 675-82
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Handle: RePEc:cje:issued:v:28:y:1995:i:3:p:675-82

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  1. Nejat Anbarci & Ching-jen Sun, 2009. "Robustness of Intermediate Agreements and Bargaining Solutions," Economics Series 2009_14, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance. [Downloadable!]
  2. Younghwan In, 2008. "On the relevance of alternatives in bargaining: generalized average pay-off solutions," International Journal of Game Theory, Springer, vol. 37(2), pages 251-264, June. [Downloadable!] (restricted)
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