Robustness of Intermediate Agreements and Bargaining Solutions
Most real-life bargaining is resolved gradually; two parties reach intermediate agreements without knowing the whole range of possibilities. These intermediate agreements serve as disagreement points in subsequent rounds. Cooperative bargaining solutions ignore these dynamics and can therefore yield accurate predictions only if they are robust to its specification. We identify robustness criteria which are satisfied by four of the best-known bargaining solutions, the Nash, Kalai-Smorodinsky, Proportional and Discrete Raiffa solutions. We show that the “robustness of intermediate agreements” plus additional well-known and plausible axioms, provide the first characterization of the Discrete Raiffa solution and novel axiomatizations of the other three solutions. Hence, we provide a unified framework for comparing these solutions’ bargaining theories.
|Date of creation:||16 Sep 2009|
|Contact details of provider:|| Postal: 221 Burwood Highway, Burwood 3125|
Phone: 61 3 9244 3815
Fax: +61 3 5227 2655
Web page: http://www.deakin.edu.au/buslaw/aef/index.php
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sobel, Joel, 1981. "Distortion of Utilities and the Bargaining Problem," Econometrica, Econometric Society, vol. 49(3), pages 597-619, May.
- Hans Peters & Eric Van Damme, 1991.
"Characterizing the Nash and Raiffa Bargaining Solutions by Disagreement Point Axioms,"
Mathematics of Operations Research,
INFORMS, vol. 16(3), pages 447-461, August.
- van Damme, E.E.C. & Peters, H., 1991. "Characterizing the Nash and Raiffa bargaining solutions by disagreement point axioms," Other publications TiSEM 4bd5eb9e-328a-45a0-aa0a-e, Tilburg University, School of Economics and Management.
- Trockel, Walter, 2011. "An axiomatization of the sequential Raiffa solution," Center for Mathematical Economics Working Papers 425, Center for Mathematical Economics, Bielefeld University.
- Roth, Alvin E, 1979. "Proportional Solutions to the Bargaining Problem," Econometrica, Econometric Society, vol. 47(3), pages 775-777, May.
- Kalai, Ehud & Smorodinsky, Meir, 1975. "Other Solutions to Nash's Bargaining Problem," Econometrica, Econometric Society, vol. 43(3), pages 513-518, May.
- Geoffroy Clippel, 2007. "An axiomatization of the Nash bargaining solution," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 29(2), pages 201-210, September.
- Geoffroy de Clippel, 2004. "An Axiomatization of the Nash Bargaining Solution," Working Papers 2004-17, Brown University, Department of Economics.
- Edgeworth, Francis Ysidro, 1881. "Mathematical Psychics," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number edgeworth1881.
- Kalai, Ehud, 1977. "Proportional Solutions to Bargaining Situations: Interpersonal Utility Comparisons," Econometrica, Econometric Society, vol. 45(7), pages 1623-1630, October.
- Ehud Kalai, 1977. "Proportional Solutions to Bargaining Situations: Interpersonal Utility Comparisons," Discussion Papers 179, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Chun, Youngsub, 1988. "Nash solution and timing of bargaining," Economics Letters, Elsevier, vol. 28(1), pages 27-31.
- Diskin, A. & Koppel, M. & Samet, D., 2011. "Generalized Raiffa solutions," Games and Economic Behavior, Elsevier, vol. 73(2), pages 452-458.
- Tijs, S.H. & Jansen, M.J.M., 1982. "On the existence of values of arbitration games," Other publications TiSEM da09ab18-3256-4e0c-ad35-b, Tilburg University, School of Economics and Management.
- Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
- Thomson, William, 1987. "Monotonicity of bargaining solutions with respect to the disagreement point," Journal of Economic Theory, Elsevier, vol. 42(1), pages 50-58, June.
- Chun, Youngsub & Thomson, William, 1990. "Bargaining with Uncertain Disagreement Points," Econometrica, Econometric Society, vol. 58(4), pages 951-959, July. Full references (including those not matched with items on IDEAS)