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Robustness of Intermediate Agreements and Bargaining Solutions

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  • Nejat Anbarci

    ()

  • Ching-jen Sun

    ()

Abstract

Most real-life bargaining is resolved gradually. During this process parties reach intermediate agreements. These intermediate agreements serve as disagreement points in subsequent rounds. We identify robustness criteria which are satisfied by three prominent bargaining solutions, the Nash, Proportional (and as a special case to the Egalitarian solution) and Discrete Raiffa solutions. We show that the .robustness of intermediate agreements. plus additional well-known and plausible axioms, provide novel axiomatizations of the above-mentioned solutions. Hence, we provide a unified frame-work for comparing these solutions’ bargaining theories.

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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 2012_7.

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Date of creation: 16 Nov 2012
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Handle: RePEc:dkn:econwp:eco_2012_7

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

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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.

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