Advanced Search
MyIDEAS: Login to save this paper or follow this series

Robustness of Intermediate Agreements and Bargaining Solutions

Contents:

Author Info

  • Nejat Anbarci

    ()

  • Ching-jen Sun

    ()

Abstract

Most real-life bargaining is resolved gradually; two parties reach intermediate agreements without knowing the whole range of possibilities. These intermediate agreements serve as disagreement points in subsequent rounds. Cooperative bargaining solutions ignore these dynamics and can therefore yield accurate predictions only if they are robust to its specification. We identify robustness criteria which are satisfied by four of the best-known bargaining solutions, the Nash, Kalai-Smorodinsky, Proportional and Discrete Raiffa solutions. We show that the “robustness of intermediate agreements” plus additional well-known and plausible axioms, provide the first characterization of the Discrete Raiffa solution and novel axiomatizations of the other three solutions. Hence, we provide a unified framework for comparing these solutions’ bargaining theories.

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://www.deakin.edu.au/buslaw/aef/workingpapers/papers/2009_14.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance in its series Economics Series with number 2009_14.

as in new window
Length:
Date of creation: 16 Sep 2009
Date of revision:
Handle: RePEc:dkn:econwp:eco_2009_14

Contact details of provider:
Postal: 221 Burwood Highway, Burwood 3125
Phone: 61 3 9244 3815
Web page: http://www.deakin.edu.au/buslaw/aef/index.php

Related research

Keywords: Nash’s bargaining problem; robustness; intermediate agreements; the Discrete Raiffa solution; the Nash solution; the Kalai-Smorodinsky solution; Proportional solutions.;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Anbarci, N. & Skaperdas, S. & Syropoulos, C., 2000. "Comparing Bargaining Solutions in the Shadow of Conflict: How Norms Against Threats Can Have Real Effects," Papers, California Irvine - School of Social Sciences 00-01-19, California Irvine - School of Social Sciences.
  2. Roth, Alvin E, 1979. "Proportional Solutions to the Bargaining Problem," Econometrica, Econometric Society, Econometric Society, vol. 47(3), pages 775-77, May.
  3. Kalai, Ehud, 1977. "Proportional Solutions to Bargaining Situations: Interpersonal Utility Comparisons," Econometrica, Econometric Society, Econometric Society, vol. 45(7), pages 1623-30, October.
  4. Walter Trockel, 2009. "An axiomatization of the Sequential Raiffa solution," Working Papers 425, Bielefeld University, Center for Mathematical Economics.
  5. Chiang, Jeongwen & Chib, Siddhartha & Narasimhan, Chakravarthi, 1998. "Markov chain Monte Carlo and models of consideration set and parameter heterogeneity," Journal of Econometrics, Elsevier, Elsevier, vol. 89(1-2), pages 223-248, November.
  6. Michelle Sovinsky Goeree, 2008. "Limited Information and Advertising in the U.S. Personal Computer Industry," Econometrica, Econometric Society, Econometric Society, vol. 76(5), pages 1017-1074, 09.
  7. Anbarci, Nejat, 1993. "Noncooperative Foundations of the Area Monotonic Solutions," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 108(1), pages 245-58, February.
  8. Moulin, H., 1984. "Implementing the Kalai-Smorodinsky bargaining solution," Journal of Economic Theory, Elsevier, Elsevier, vol. 33(1), pages 32-45, June.
  9. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, Econometric Society, vol. 18(2), pages 155-162, April.
  10. Nejat Anbarci & John H. Boyd III, 2008. "Nash Demand Game and the Kalai-Smorodinsky Solution," Economics Series 2008_11, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance.
  11. Anbarci, Nejat & Bigelow, John P., 1994. "The area monotonic solution to the cooperative bargaining problem," Mathematical Social Sciences, Elsevier, Elsevier, vol. 28(2), pages 133-142, October.
  12. Edgeworth, Francis Ysidro, 1881. "Mathematical Psychics," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, McMaster University Archive for the History of Economic Thought, number edgeworth1881.
  13. Alvin E Roth, 2008. "Axiomatic Models of Bargaining," Levine's Working Paper Archive 122247000000002376, David K. Levine.
  14. Bigelow, John Payne & Anbarci, Nejat, 1993. "Non-dictatorial, Pareto-monotonic, cooperative bargaining : An impossibility theorem," European Journal of Political Economy, Elsevier, vol. 9(4), pages 551-558, November.
  15. Gul, Faruk, 1989. "Bargaining Foundations of Shapley Value," Econometrica, Econometric Society, Econometric Society, vol. 57(1), pages 81-95, January.
  16. Diskin, A. & Koppel, M. & Samet, D., 2011. "Generalized Raiffa solutions," Games and Economic Behavior, Elsevier, Elsevier, vol. 73(2), pages 452-458.
  17. Sobel, Joel, 1981. "Distortion of Utilities and the Bargaining Problem," Econometrica, Econometric Society, Econometric Society, vol. 49(3), pages 597-619, May.
  18. Gur Huberman, 2001. "Contagious Speculation and a Cure for Cancer: A Nonevent that Made Stock Prices Soar," Journal of Finance, American Finance Association, American Finance Association, vol. 56(1), pages 387-396, 02.
  19. Anbarci, Nejat & Yi, Gyoseob, 1992. "A meta-allocation mechanism in cooperative bargaining," Economics Letters, Elsevier, Elsevier, vol. 38(2), pages 175-179, February.
  20. Damme, E.E.C. van & Peters, H., 1991. "Characterizing the Nash and Raiffa bargaining solutions by disagreement point axioms," Open Access publications from Tilburg University urn:nbn:nl:ui:12-154419, Tilburg University.
  21. Rubinstein, Ariel & Salant, Yuval, 2006. "A model of choice from lists," Theoretical Economics, Econometric Society, Econometric Society, vol. 1(1), pages 3-17, March.
  22. Chun, Youngsub & Thomson, William, 1990. "Bargaining with Uncertain Disagreement Points," Econometrica, Econometric Society, Econometric Society, vol. 58(4), pages 951-59, July.
  23. Tijs, S.H. & Jansen, M.J.M., 1982. "On the existence of values of arbitration games," Open Access publications from Tilburg University urn:nbn:nl:ui:12-154288, Tilburg University.
  24. Eric van Damme, 1984. "The Nash Bargaining Solution is Optimal," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 597, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  25. Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, Econometric Society, vol. 21(1), pages 128-140, April.
  26. Howard, J. V., 1992. "A social choice rule and its implementation in perfect equilibrium," Journal of Economic Theory, Elsevier, Elsevier, vol. 56(1), pages 142-159, February.
  27. Geoffroy Clippel, 2007. "An axiomatization of the Nash bargaining solution," Social Choice and Welfare, Springer, Springer, vol. 29(2), pages 201-210, September.
  28. Chun, Youngsub, 1988. "The equal-loss principle for bargaining problems," Economics Letters, Elsevier, Elsevier, vol. 26(2), pages 103-106.
  29. Chun, Youngsub, 1988. "Nash solution and timing of bargaining," Economics Letters, Elsevier, Elsevier, vol. 28(1), pages 27-31.
  30. Damme, Eric van, 1986. "The Nash bargaining solution is optimal," Journal of Economic Theory, Elsevier, Elsevier, vol. 38(1), pages 78-100, February.
  31. Thomson, William, 1987. "Monotonicity of bargaining solutions with respect to the disagreement point," Journal of Economic Theory, Elsevier, Elsevier, vol. 42(1), pages 50-58, June.
  32. Thomson, William, 1994. "Cooperative models of bargaining," Handbook of Game Theory with Economic Applications, Elsevier, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 2, chapter 35, pages 1237-1284 Elsevier.
  33. Kalai, Ehud & Smorodinsky, Meir, 1975. "Other Solutions to Nash's Bargaining Problem," Econometrica, Econometric Society, Econometric Society, vol. 43(3), pages 513-18, May.
  34. Nejat Anbarci, 1995. "Reference Functions and Balanced Concessions in Bargaining," Canadian Journal of Economics, Canadian Economics Association, vol. 28(3), pages 675-82, August.
  35. Damme, E.E.C. van, 1986. "The Nash bargaining solution is optimal," Open Access publications from Tilburg University urn:nbn:nl:ui:12-154426, Tilburg University.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Haruo Imai & Hannu Salonen, 2012. "A characterization of a limit solution for finite horizon bargaining problems," International Journal of Game Theory, Springer, Springer, vol. 41(3), pages 603-622, August.
  2. Walter Trockel, 2009. "An exact non-cooperative support for the sequential Raiffa solution," Working Papers 426, Bielefeld University, Center for Mathematical Economics.
  3. Samet, Dov, 2009. "What if Achilles and the tortoise were to bargain? An argument against interim agreements," MPRA Paper 23370, University Library of Munich, Germany.

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:dkn:econwp:eco_2009_14. See general information about how to correct material in RePEc.

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

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.