We propose a new framework for bargaining in which the process follows an agenda. The agenda is represented by a family, parameterized by time, of increasing sets of joint utilities for possible agreements. This is in contrast to the single set used in the standard framework. The set at each time involves all possible agreements on the issues discussed up to that time. A \emph{bargaining solution} for an agenda specifies a path of agreements, one for each time. We characterize axiomatically a solution that is ordinal, meaning that it is covariant with order- preserving transformations of the utility representations. It can be viewed as the limit of a step-by-step bargaining process in which the agreement point of the last negotiation becomes the disagreement point for the next. The stepwise agreements may follow the Nash solution, the Kalai-Smorodinsky solution or many others, and the ordinal solution will still emerge as the steps tend to zero. Shapley showed that ordinal solutions exist for the standard framework for three players but not for two; the present framework generates an ordinal solution for any number of bargainers, in particular for two.
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Barry O'Neill & Dov Samet & Zvi Wiener & Eyal Winter, 2002.
"Bargaining with an Agenda,"
Discussion Paper Series
dp315, Center for Rationality and Interactive Decision Theory, Hebrew University, Jerusalem.
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Find related papers by JEL classification: C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory D8 - Microeconomics - - Information, Knowledge, and Uncertainty
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Julian Arevalo, 2004.
"Gradual Nash bargaining with endogenous agenda. A path-dependent model,"
Colombian Economic Journal,
Academia Colombiana de Ciencias Economicas, Colegio Mayor de Nuestra Senora del Rosario, Pontificia Universidad Javeriana, Universidad de Antioquia, Universidad de los Andes, Universidad del Valle, Un, vol. 2(1), pages 189-212, November.
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