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Bargaining Power: Significance, Structure and Development

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  • Jan Cervenka

    (University of Finance and Administration)

Abstract

In game theory, the bargaining problem is defined as an exchange of utilities between negotiators. Assumptions used in game theoretical solutions are often partially or fully not applicable in real situations. The outcome of the bargaining also depends on the parameter called bargaining power. This parameter, although usually neglected or perceived only as static, determines to a large extent on which negotiator will succeed with his idea of the distribution of utilities. Paper focuses on the identification of the elements of bargaining power, the possibilities of their exploration and development. Bargaining power is described as a combination of facts and abilities that can be variable during bargaining. The paper analyses these facts and abilities, divides them into individual parts and suggests, how to influence them both immediately and in the long run.

Suggested Citation

  • Jan Cervenka, 2019. "Bargaining Power: Significance, Structure and Development," ACTA VSFS, University of Finance and Administration, vol. 13(1), pages 79-93.
    • Handle: RePEc:prf:journl:v:13:y:2019:i:1:p:79-93
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    References listed on IDEAS

    as
    1. Svejnar, Jan, 1986. "Bargaining Power, Fear of Disagreement, and Wage Settlements: Theory and Evidence from U.S. Industry," Econometrica, Econometric Society, vol. 54(5), pages 1055-1078, September.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    game theory; bargaining problem; bargaining solution; bargaining power;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other

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