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A theory of agreements in the shadow of conflict

e 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 conflict, 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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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: 27 Feb 2006
Date of revision:
Handle: RePEc:edn:esedps:139
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