On the Strategic Use of Focal Points in Bargaining Situations
نویسنده
چکیده
This paper argues that the notion of focal points is important in understanding bargaining processes. Recent literature confines a discussion of the usefulness of the notion to coordination problems and when bargaining experiments result in outcomes that are inconsistent with a straightforward interpretation of economic theory, some notion of ‘fairness’ is invoked. This paper uses symmetry requirements to formalize the notion of focal points. By doing so, it explains the focality of equal split division and it re-interprets recent experimental evidence in bargaining games. Experimental economists should try to empirically disentangle the importance of focal points from other explanatory factors (such as fairness). One way to do so, would be to study modal (instead of average) responses more systematically. Future theoretical research should focus on the strategic implications of proposing a frame (focal point) to conceive of the bargaining problem.
منابع مشابه
From axiomatic to strategic models of bargaining with logical beliefs and goals
In this paper, we introduce axiomatic and strategic models for bargaining and investigate the link between the two. Bargaining situations are described in propositional logic while the agents’ preferences over the outcomes are expressed as ordinal preferences. Our main contribution is an axiomatic theory of bargaining. We propose a bargaining solution based on the well-known egalitarian social ...
متن کاملDoes Scale of Public Hospitals Affect Bargaining Power? Evidence From Japan
Background Many of public hospitals in Japan have had a deficit for a long time. Japanese local governments have been encouraging public hospitals to use group purchasing of drugs to benefit from the economies of scale, and increase their bargaining power for obtaining discounts in drug purchasing, thus improving their financial situation. In this study, we empirically investigate whether or no...
متن کاملA Tale of Two Bargaining Solutions
We set up a rich bilateral bargaining model with four salient points (disagreement point, ideal point, reference point, and tempered aspirations point), where the disagreement point and the utility possibilities frontier are endogenously determined. This model allows us to compare two bargaining solutions that use reference points, the Gupta-Livne solution and the tempered aspirations solution,...
متن کاملFocal points in bargaining and the Kalai-Smorodinsky solution
The Kalai-Smorodinsky solution is characterized by three axioms: balanced focal point, disagreement point monotonicity, and restricted IIA.
متن کامل