IDEAS home Printed from https://ideas.repec.org/p/hal/cesptp/hal-01394208.html
   My bibliography  Save this paper

A new mechanism for resolving bargaining impasses between risk averse parties

Author

Listed:
  • Emily Tanimura

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Sylvie Thoron

    (LIPHA - Laboratoire Interdisciplinaire d'Etude du Politique Hannah Arendt Paris-Est - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12)

Abstract

In a sequential bargaining game framework with complete information and no discounting, this paper proposes a mechanism in the spirit of a final offers arbitration (FOA). At each step, two parties may stop negotiating in order to implement a lottery between the two current proposals or go on making new proposals. A crucial difference with the FOA is that the list of past proposals is recorded and used by the mechanism. Once a lottery has been implemented, the parties can reject the offer which has been drawn and go back to a lottery between proposals made in the past. At the dominant subgame perfect equilibrium the two parties make gradual concessions leading to a final agreement which coincides with the Raiffa solution. The main incentive to reach an agreement comes from risk-aversion. The necessity to make step by step concessions generates evolving disagreement points and gradualism.

Suggested Citation

  • Emily Tanimura & Sylvie Thoron, 2016. "A new mechanism for resolving bargaining impasses between risk averse parties," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01394208, HAL.
  • Handle: RePEc:hal:cesptp:hal-01394208
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:cesptp:hal-01394208. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.