Gradual Negotiations and Proportional Solutions
AbstractI characterize the proportional N-person bargaining solutions by individual rationality, translation invariance, feasible set continuity, and a new axiom - interim improvement. The latter says that if the disagreement point d is known, but the feasible set is not - it may be either S or T, where S is a subset of T - then there exists a point d' in S, d' > d, such that replacing d with d' as the disagreement point would not change the final bargaining outcome, no matter which feasible set will be realized, S or T. In words, if there is uncertainty regarding a possible expansion of the feasible set, the players can wait until it is resolved; in the meantime, they can find a Pareto improving interim outcome to commit to - a commitment that has no effect in case negotiations succeed, but promises higher disagreement payoffs to all in case negotiations fail prior to the resolution of uncertainty.
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Bibliographic InfoPaper provided by University of Haifa, Department of Economics in its series Working Papers with number WP2011/8.
Date of creation:
Date of revision: 09 Oct 2011
Bargaining; Proportional solutions;
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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-11-01 (All new papers)
- NEP-GTH-2011-11-01 (Game Theory)
- NEP-MIC-2011-11-01 (Microeconomics)
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