Advanced Search
MyIDEAS: Login

Efficient Bilateral Negotiation

Contents:

Author Info

  • Milan Horniaček
Registered author(s):

    Abstract

    The paper analyzes a negotiation between two players (e.g. finns in duopoly wishing to fonn a cartel or countries involved in a trade dispute) about levels of their activities that may be hannful to the other player. Negotiation takes place in discrete time, with alternating offers of the two players, and it can last forever. Until the players reach an agreement, they can freely choose levels of their activities. Once the agreement is reached, it is binding. The negotiation process is modelled by a noncooperative extensive fonn game. The analysis concentrates on Markov perfect equilibria, i.e. sub game perfect equilibria in Markov strategies. These strategies prescribe the same behavior in all subgames that are strategically equivalent. When players use Markov strategies, their current moves (actions taken, proposals in negotiation, and reactions to rival's proposals) do not depend on past moves of any of them that do not affect payoffs of at leastone of them from current or future moves. In each Markov perfect equilibrium the players reach an agreement on a pair of activities, which gives Pareto efficient vector of payoffs, in the first round of negotiation.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://ces.utia.cas.cz/bulletin/index.php/bulletin/article/view/109
    Download Restriction: no

    Bibliographic Info

    Article provided by The Czech Econometric Society in its journal Bulletin of the Czech Econometric Society.

    Volume (Year): 9 (2002)
    Issue (Month): 16 ()
    Pages:

    as in new window
    Handle: RePEc:czx:journl:v:9:y:2002:i:16:id:109

    Contact details of provider:
    Email:
    Web page: http://ces.utia.cas.cz
    More information through EDIRC

    Related research

    Keywords: bilateral negotiation; extensive fonn game; Markov perfect equilibrium; Markov strategy; Pareto efficient agreement;

    Find related papers by JEL classification:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:czx:journl:v:9:y:2002:i:16:id:109

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jozef Barunik).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.