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A theory of agreements in the shadow of conflict

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Author Info
Joan Esteban
Jozsef Sakovics ()

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Abstract

We present a novel approach to N-person bargaining based on the idea that the agreement reached in a negotiation is determined by how the direct conflict resulting from disagreement would be resolved. Our basic building block is the disagreement function, which maps each set of feasible outcomes into a disagreement point. Adding this function to the description of the bargaining problem, a weak axiom based on individual rationality leads to a unique solution: the agreement in the shadow of conclift, ASC. This agreement must be constructed as a sequence of partial agreements, each of which is reached as a function of the parties' relative power in the disagreement scenario. We also provide non-cooperative implementation.

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Publisher Info
Paper provided by Edinburgh School of Economics, University of Edinburgh in its series ESE Discussion Papers with number 139.

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Length: 32
Date of creation: Dec 2005
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Handle: RePEc:edn:esedps:139

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Related research
Keywords: bargaining; conflict; disagreement.;

Find related papers by JEL classification:
C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances

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