Questions tagged [bargaining]

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1answer
65 views

Nash bargaining solution textbook treatment

I'm looking for some reference that treats the solution that Nash gave to the bargaining problem in which two parties must share the surplus derived from engaging in a cooperative relationship. ...
2
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0answers
18 views

Nash Bargain VS. Rubinstein Game with Outside Option

I am reading a paper, Kessier & Lulfesmann 2006, and find that its main result totally depends on that the model setting is based on a Rubinstein game with outside option rather than a Nash ...
3
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0answers
35 views

Gale's version of the Rubinstein-Wolinsky (1985) model

Likely to be a very stupid doubt. I am reading Douglas Gale's book "The Strategic Foundations of General Equilibrium", which presents a brief version of "Equilibrium in a Market with ...
0
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0answers
16 views

Negotiations under expected utility maximization

A buyer is negotiating with a used car salesperson. The value of the car to the seller is uniformly distributed between 0 and 5000. Value to the buyer is 50 percent more than that of the seller (i.e. ...
3
votes
1answer
61 views

Efficiency in a market that is both a monopoly and a monopsony

We know that market power in general leads inefficient outcomes (in terms of Pareto efficiency). This makes instinctive appeal as, for example, a powerful seller who has a lot of market power can ...
2
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0answers
38 views

Fehr-Schmidt, Ultimatum game, Subgame-Perfect Nash Equilibrium

I'm studying the different variations of the ultimatum games. I've spent some time on this following game: Assume now that each player does not only care about the amount of money she receives, but ...
0
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1answer
34 views

Bargaining Theory: reading list

I looked around in the forum but I have not found this question yet. I would like to approach the topic of bargaining models in the spirit of Rubinstein, Ariel. "Perfect equilibrium in a ...
2
votes
4answers
116 views

How to achieve the best outcome by a single statement in this game?

This game is taken from Schelling's Game Theory: How to Make Decisions by R.V. Dodge, in which contenders practice brinksmanship to their own advantages. It goes as follows: Anderson, Barnes, and ...
3
votes
1answer
137 views

Is the Nash product really maximised ex post?

In my game theory class this term, we studied Nash bargaining. It is only now when starting to prepare for the exam that I have come to realise there is something I fundamentally don't understand, and ...
0
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1answer
23 views

Computation of Different Axiomatic Barganing Solutions

I need help with the following question. Take a two-agent bargaining problem. d=(0,0). Pick a strictly concave function for the bargaining frontier. Fix the intersection of the frontier with the y-...
3
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0answers
44 views

Asymmetric Nash Bargaining

The Nash bargaining solution selects the unique solution to the maximization problem $\max_{s_1, s_2 } (s_1 - d_1) (s_2 - d_2)$ such that the solution satisfy the following axioms : Invariance ...
1
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0answers
106 views

Take It Or Leave It Strategy: Social Optimum

Here is what I understood Using Backward Induction, I inferred that buyer offers a price, say, $P$ and the seller will sell only if $P \geq c(I)$. Setting the lowest possible Price that will ensure ...
3
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1answer
227 views

Disagreement in Strategic Bargaining

Construct a pair of startegies for the ultimatum game ($T=1$ bargaining game), that constitutes a Nash Equilibrium and together support the outcome that there is no agreement reached by the two ...
1
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0answers
57 views

Two-sided market and bargaining game

I am solving a bargaining problem in which I have two players $player_1 $ and $ player_2 $. Both of them have a service (represented as $ z_1 ,z_2 $) that they can provide . Moreover they will ...
4
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1answer
308 views

Axiomatic Bargaining: Kalai-Smorodinsky and Nash solutions coincide

Under standard assumptions on the domain of bargaining problems like Pareto Optimality, Symmetric, Scale Invariance and Independent of Irrelevant Alternatives / Individual Monotonicty, in which ...
9
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3answers
254 views

Why is bargaining more common in poor countries?

In poor countries, one might bargain over even say a bottle of water. This is unthinkable in most rich countries. (And in countries that develop rapidly, one can actually notice the steady movement ...
24
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4answers
9k views

Why is bartering uncommon in modern countries?

Recently, I witnessed two acquaintances of mine engaging in bartering, where one traded his services for the services of the other. Both services had about the same value. By trading them directly, ...