Endogenous bargaining power
We 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. Using this function and a weak axiom based on individual rationality we reach a unique solution: the agreement in the shadow of conflict, ASC. This agreement may be construed as the limit of a sequence of partial agreements, each of which is reached as a function of the parties’ relative power. We examine the connection between ASC and asymmetric Nash solutions. We show the connection between the power of the parties embodied in the ASC solution and the bias in the SWF that would select ASC as an asymmetric Nash solution.
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.:
- Barry O'Neill & Dov Samet & Zvi Wiener & Eyal Winter, 2002.
"Bargaining with an Agenda,"
Discussion Paper Series
dp315, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
- Ehud Kalai, 1977.
"Proportional Solutions to Bargaining Situations: Interpersonal Utility Comparisons,"
179, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Kalai, Ehud, 1977. "Proportional Solutions to Bargaining Situations: Interpersonal Utility Comparisons," Econometrica, Econometric Society, vol. 45(7), pages 1623-30, October.
- Esteban, Joan & Ray, Debraj, 1999. "Conflict and Distribution," Journal of Economic Theory, Elsevier, vol. 87(2), pages 379-415, August.
- Clara Ponsati & Joel Watson, 1998. "Multiple-Issue Bargaining and Axiomatic Solutions," International Journal of Game Theory, Springer, vol. 26(4), pages 501-524.
- Ariel Rubinstein, 2010.
"Perfect Equilibrium in a Bargaining Model,"
Levine's Working Paper Archive
252, David K. Levine.
- Chen, Mark A. & Maskin, Eric S., 1999. "Bargaining, Production, and Monotonicity in Economic Environments," Journal of Economic Theory, Elsevier, vol. 89(1), pages 140-147, November.
- Svejnar, Jan, 1986.
"Bargaining Power, Fear of Disagreement, and Wage Settlements: Theory and Evidence from U.S. Industry,"
Econometric Society, vol. 54(5), pages 1055-78, September.
- SVEJNAR, Jan, . "Bargaining power, fear of disagreement, and wage settlements: theory and evidence from U.S. industry," CORE Discussion Papers RP 720, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Svejnar, J., 1984. "Bargaining power, fear of disagreement and wage settlements: theory and evidence from U.S. industry," CORE Discussion Papers 1984037, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April.
- Lundberg, S. & Pollak, R.A., 1991.
"Separate Spheres Bargaining and the Marriage Market,"
91-08, University of Washington, Department of Economics.
- Lundberg, Shelly & Pollak, Robert A, 1993. "Separate Spheres Bargaining and the Marriage Market," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 988-1010, December.
- Lundberg, S. & Pollak, R.A., 1991. "Separate Spheres Bargaining and the Marriage Market," Discussion Papers in Economics at the University of Washington 91-08, Department of Economics at the University of Washington.
- Powell, Robert, 1996. "Bargaining in the Shadow of Power," Games and Economic Behavior, Elsevier, vol. 15(2), pages 255-289, August.
- Kalai, Ehud & Smorodinsky, Meir, 1975. "Other Solutions to Nash's Bargaining Problem," Econometrica, Econometric Society, vol. 43(3), pages 513-18, May.
- John C. Harsanyi & Reinhard Selten, 1972. "A Generalized Nash Solution for Two-Person Bargaining Games with Incomplete Information," Management Science, INFORMS, vol. 18(5-Part-2), pages 80-106, January.
- Roemer, John E., 1988. "Axiomatic bargaining theory on economic environments," Journal of Economic Theory, Elsevier, vol. 45(1), pages 1-31, June.
- Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
When requesting a correction, please mention this item's handle: RePEc:upf:upfgen:644. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.