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- Title
Revising claims and resisting ultimatums in bargaining problems.
- Authors
Spinnewijn, Johannes; Spinnewyn, Frans
- 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.
- Subjects
ULTIMATUMS (International relations); COLLECTIVE bargaining; PROBLEM solving; ECONOMIC equilibrium; ECONOMIC models
- Publication
Review of Economic Design, 2015, Vol 19, Issue 2, p91
- ISSN
1434-4742
- Publication type
Article
- DOI
10.1007/s10058-015-0168-7