Revising claims and resisting ultimatums in bargaining problems

Spinnewijn, Johannes ORCID: 0000-0002-7963-5847 and Spinnewyn, Frans (2015) Revising claims and resisting ultimatums in bargaining problems. Review of Economic Design, 19 (2). pp. 91-116. ISSN 1434-4742

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Abstract

We propose a simple mechanism which implements a unique solution to the bargaining problem with two players in subgame-perfect equilibrium. The mechanism incorporates two important features of negotiations; players can revise claims in an attempt to reach a compromise or pursue their claims in an ultimate take-it-or-leave-it offer. Players restrain their claims to avoid a weak bargaining position or their resistance to uncompromising behavior to acquire leadership. The Nash solution and the Kalai–Smorodinsky solution are implemented in the extreme cases when respectively no and all revisions are allowed.

Item Type:	Article
Official URL:	http://link.springer.com/journal/10058
Additional Information:	© 2015 Springer-Verlag Berlin Heidelberg
Divisions:	Economics
Subjects:	H Social Sciences > H Social Sciences (General) Q Science > QA Mathematics
JEL classification:	C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C78 - Bargaining Theory; Matching Theory D - Microeconomics > D7 - Analysis of Collective Decision-Making > D74 - Conflict; Conflict Resolution; Alliances
Date Deposited:	21 Apr 2016 12:44
Last Modified:	12 Dec 2024 01:00
URI:	http://eprints.lse.ac.uk/id/eprint/66197

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