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Bargaining Unexplained

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  • Dan Usher

    (Department of Economics, Queen's University)

Abstract

We know that people strike bargains and that civilized life could not proceed otherwise. We do not know how bargains are struck. We have no explanation of bargaining, comparable to the general equilibrium in the economy, accounting for essential features of bargaining as we know it with reference to universal self-interested behaviour subject only to economy-wide rules. This claim is supported here in a survey of the principal models of bargaining: as a reflection of a shared sense of fairness, as an imposed sequence of offers, as a source of transaction cost and as a species of conflict. Also discussed is the dual role of bargaining in politics as a necessary complement to voting and as an impediment to the exploitation of minority groups.

Suggested Citation

  • Dan Usher, 2009. "Bargaining Unexplained," Working Paper 1208, Economics Department, Queen's University.
    • Handle: RePEc:qed:wpaper:1208
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    File URL: https://www.econ.queensu.ca/sites/econ.queensu.ca/files/qed_wp_1208.pdf
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    References listed on IDEAS

    as
    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. Muthoo,Abhinay, 1999. "Bargaining Theory with Applications," Cambridge Books, Cambridge University Press, number 9780521576475.
    3. Fearon, James D., 1995. "Rationalist explanations for war," International Organization, Cambridge University Press, vol. 49(3), pages 379-414, July.
    4. Hirshleifer, Jack, 1991. "The Technology of Conflict as an Economic Activity," American Economic Review, American Economic Association, vol. 81(2), pages 130-134, May.
    5. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
    6. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
    7. George L. Priest & Benjamin Klein, 1984. "The Selection of Disputes for Litigation," The Journal of Legal Studies, University of Chicago Press, vol. 13(1), pages 1-56, January.
    8. Dan Usher, 2012. "Bargaining and voting," Public Choice, Springer, vol. 151(3), pages 739-755, June.
    9. Brams,Steven J. & Taylor,Alan D., 1996. "Fair Division," Cambridge Books, Cambridge University Press, number 9780521556446.
    10. Garfinkel, Michelle R, 1990. "Arming as a Strategic Investment in a Cooperative Equilibrium," American Economic Review, American Economic Association, vol. 80(1), pages 50-68, March.
    11. John Sutton, 1986. "Non-Cooperative Bargaining Theory: An Introduction," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 53(5), pages 709-724.
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    Cited by:

    1. Dan Usher, 2012. "Bargaining and voting," Public Choice, Springer, vol. 151(3), pages 739-755, June.
    2. Gjelsvik, Marit Linnea & Nymoen, Ragnar & Sparrman, Victoria, 2015. "Have Inflation Targeting and EU labour Immigration Changed the System of Wage Formation in Norway," Memorandum 18/2015, Oslo University, Department of Economics.
    3. Dan Usher, 2010. "Three Papers On Bargaining," Working Paper 1239, Economics Department, Queen's University.
    4. Richard Wagner & Deema Yazigi, 2014. "Form vs. substance in selection through competition: elections, markets, and political economy," Public Choice, Springer, vol. 159(3), pages 503-514, June.

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    More about this item

    Keywords

    Bargaining; Comprimise; Fairness; Self-interest; Transaction cost; conflict;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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