Economics Stack Exchange
Economics Stack Exchange

Questions tagged [bargaining]

17 questions
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4 answers

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, they didn't pay VAT or tax on income, as no money…
Bart
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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 from bargaining to fixed prices.) The "obvious"…
user18
4
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1 answer

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 conditions (on feasible set S, or disagreemnt point d)…
John Stern
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3
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1 answer

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. Following Wikipedia, the solution proposed by Nash…
manifold
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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 Sequential Bargaining" (pg 15). I am not sure how the model is…
Tanay
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3
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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 benefit by restricting supply, single-handedly…
Ishan Kashyap Hazarika
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3
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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 hope that somebody here might be able to help.…
Jhonny
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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 Symmetry Pareto efficiency Independence of…
Kamel Ismaël
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1 answer

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 players and the payoffs are zero to each. Show that…
S.Rana
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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 bargain. The main difference (as far as I learn from the…
Alalalalaki
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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 also about the equity of the allocation.…
Justin Malik
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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 Cooper are to fight a gun duel. They will stand close…
Eric
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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 that Seller sells the good would mean that buyer…
S.Rana
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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 $) that they can provide . Moreover they will charge some price(cost) ($ \lambda_1, \lambda_2 $ )…
user9919909
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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. 1.5 times of the seller's). Both are rik neutral,…
data_driven
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