IDEAS home Printed from https://ideas.repec.org/p/vnm/wpdman/150.html
   My bibliography  Save this paper

The probability to reach an agreement as a foundation for axiomatic bargaining

Author

Listed:
  • Lorenzo Bastianello

    () (LEMMA Universite Paris 2 Pantheon-Assas)

  • Marco LiCalzi

    () (Dept. of Management, Università Ca' Foscari Venice)

Abstract

We revisit the Nash bargaining model and axiomatize a procedural solution that maximizes the probability of successful bargaining. This probability-based approach nests both the standard and the ordinal Nash solution, and yet need not assume that bargainers have preferences over lotteries or that choice sets are convex. We consider both mediator-assisted bargaining and standard unassisted bargaining. We solve a long-standing puzzle and offer a natural interpretation of the product operator underlying the Nash solution. We characterize other known solution concepts, including the egalitarian and the utilitarian solutions.

Suggested Citation

  • Lorenzo Bastianello & Marco LiCalzi, 2018. "The probability to reach an agreement as a foundation for axiomatic bargaining," Working Papers 02, Department of Management, Università Ca' Foscari Venezia.
  • Handle: RePEc:vnm:wpdman:150
    as

    Download full text from publisher

    File URL: http://virgo.unive.it/wpideas/storage/2018wp02.pdf
    File Function: First version, 2018
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Marco LiCalzi, 2005. "A language for the construction of preferences under uncertainty," Game Theory and Information 0509002, University Library of Munich, Germany.
    2. Erio Castagnoli & Marco LiCalzi, 2005. "Expected utility without utility," Game Theory and Information 0508004, University Library of Munich, Germany.
    3. Trockel, W., 2008. "The Nash product is a utility representation of the Pareto ordering," Economics Letters, Elsevier, vol. 99(2), pages 220-222, May.
    4. 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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lorenzo Bastianello & Marco LiCalzi, 2015. "Target-based solutions for Nash bargaining," Working Papers 5, Department of Management, Università Ca' Foscari Venezia.
    2. Robert Bordley & Marco Licalzi & Luisa Tibiletti, 2017. "A Target-Based Foundation for the “Hard-Easy Effect” Bias," Eurasian Studies in Business and Economics, in: Mehmet Huseyin Bilgin & Hakan Danis & Ender Demir & Ugur Can (ed.), Country Experiences in Economic Development, Management and Entrepreneurship, pages 659-671, Springer.
    3. Sergiy Gerasymchuk, 2007. "Mean-Variance Portfolio Selection with Reference Dependent Preferences," Working Papers 150, Department of Applied Mathematics, Università Ca' Foscari Venezia.
    4. DellaVigna, Stefano & LiCalzi, Marco, 2001. "Learning to make risk neutral choices in a symmetric world," Mathematical Social Sciences, Elsevier, vol. 41(1), pages 19-37, January.
    5. José-Manuel Giménez-Gómez & António Osório & Josep E. Peris, 2015. "From Bargaining Solutions to Claims Rules: A Proportional Approach," Games, MDPI, Open Access Journal, vol. 6(1), pages 1-7, March.
    6. Anderhub, Vital & Guth, Werner & Marchand, Nadege, 2004. "Early or late conflict settlement in a variety of games - An experimental study," Journal of Economic Psychology, Elsevier, vol. 25(2), pages 177-194, April.
    7. Wynn C. Stirling & Teppo Felin, 2016. "Satisficing, preferences, and social interaction: a new perspective," Theory and Decision, Springer, vol. 81(2), pages 279-308, August.
    8. Marek Hudik, 0. "Equilibrium as compatibility of plans," Theory and Decision, Springer, vol. 0, pages 1-20.
    9. Kai A. Konrad & Thomas R. Cusack, 2013. "Hanging Together or Being Hung Separately: The Strategic Power of Coalitions where Bargaining Occurs with Incomplete Information," CESifo Working Paper Series 4071, CESifo.
    10. Lv, Wei & Li, Hongyi & Tang, Jiafu, 2017. "Bargaining model of labor disputes considering social mediation and bounded rationalityAuthor-Name: Liu, Dehai," European Journal of Operational Research, Elsevier, vol. 262(3), pages 1064-1071.
    11. Forgo, F. & Szidarovszky, F., 2003. "On the relation between the Nash bargaining solution and the weighting method," European Journal of Operational Research, Elsevier, vol. 147(1), pages 108-116, May.
    12. Abbas, 2004. "Utility Probability Duality," General Economics and Teaching 0403001, University Library of Munich, Germany.
    13. Binmore, Ken & Osborne, Martin J. & Rubinstein, Ariel, 1992. "Noncooperative models of bargaining," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 7, pages 179-225, Elsevier.
    14. Driesen, Bram & Perea, Andrés & Peters, Hans, 2012. "Alternating offers bargaining with loss aversion," Mathematical Social Sciences, Elsevier, vol. 64(2), pages 103-118.
    15. Wenqing Chen & Melvyn Sim, 2009. "Goal-Driven Optimization," Operations Research, INFORMS, vol. 57(2), pages 342-357, April.
    16. Xu, Zeyu, 2007. "A survey on intra-household models and evidence," MPRA Paper 3763, University Library of Munich, Germany.
    17. Ronghuo Zheng & Tinglong Dai & Katia Sycara & Nilanjan Chakraborty, 2016. "Automated Multilateral Negotiation on Multiple Issues with Private Information," INFORMS Journal on Computing, INFORMS, vol. 28(4), pages 612-628, November.
    18. Garibaldi, Pietro & Wasmer, Etienne, 2001. "Labor Market Flows and Equilibrium Search Unemployment," IZA Discussion Papers 406, Institute of Labor Economics (IZA).
    19. M. Puy, 2013. "Stable coalition governments: the case of three political parties," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(1), pages 65-87, January.
    20. Youngsub Chun, 2001. "The Separability Principle in Bargaining," Working Paper Series no43, Institute of Economic Research, Seoul National University.

    More about this item

    Keywords

    cooperative bargaining; mediation; arbitration; benchmarking; copulas.;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:vnm:wpdman:150. 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: (Marco LiCalzi). General contact details of provider: http://edirc.repec.org/data/mdvenit.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.