Book contents
- Frontmatter
- Contents
- Acknowledgments
- Notations
- Introduction
- 1 The game of chess
- 2 Utility theory
- 3 Extensive-form games
- 4 Strategic-form games
- 5 Mixed strategies
- 6 Behavior strategies and Kuhn's Theorem
- 7 Equilibrium refinements
- 8 Correlated equilibria
- 9 Games with incomplete information and common priors
- 10 Games with incomplete information: the general model
- 11 The universal belief space
- 12 Auctions
- 13 Repeated games
- 14 Repeated games with vector payoffs
- 15 Bargaining games
- 16 Coalitional games with transferable utility
- 17 The core
- 18 The Shapley value
- 19 The bargaining set
- 20 The nucleolus
- 21 Social choice
- 22 Stable matching
- 23 Appendices
- References
- Index
15 - Bargaining games
- Frontmatter
- Contents
- Acknowledgments
- Notations
- Introduction
- 1 The game of chess
- 2 Utility theory
- 3 Extensive-form games
- 4 Strategic-form games
- 5 Mixed strategies
- 6 Behavior strategies and Kuhn's Theorem
- 7 Equilibrium refinements
- 8 Correlated equilibria
- 9 Games with incomplete information and common priors
- 10 Games with incomplete information: the general model
- 11 The universal belief space
- 12 Auctions
- 13 Repeated games
- 14 Repeated games with vector payoffs
- 15 Bargaining games
- 16 Coalitional games with transferable utility
- 17 The core
- 18 The Shapley value
- 19 The bargaining set
- 20 The nucleolus
- 21 Social choice
- 22 Stable matching
- 23 Appendices
- References
- Index
Summary
Chapter summary
In this chapter we present bargaining games, which model situations in which two or more players bargain toward an agreed-upon outcome. The set of all possible outcomes is called the feasible set and each outcome can be attained only by the unanimous agreement of all players. Different players typically prefer different outcomes, which explains the bargaining aspect of the model. A default outcome, called the disagreement point, is realized if the players fail to reach an agreement.
A solution concept for bargaining games is a function that assigns to every bargaining game an outcome that can be looked at as the outcome that would be recommended to the players by an arbitrator or a judge. We list several desirable properties that a solution concept for two-player bargaining games could satisfy and provide the unique solution concept that satisfies all these properties, namely, the Nash solution for bargaining games. Variants of the Nash solution, like the Kalai–Smorodinsky solution, are obtained by imposing a different set of properties that a solution concept should satisfy. Finally, the model and some of the results are extended to bargaining games with more than two players.
It is frequently the case that two (or more) parties conduct negotiations over an issue, with the payoff to each party dependent on the outcome of the negotiation process. Examples include negotiations between employers and employees on working conditions, nations negotiating trade treaties, and company executives negotiating corporate mergers and acquisitions.
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- Game Theory , pp. 622 - 658Publisher: Cambridge University PressPrint publication year: 2013
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