We compare the bargaining power of the patentee under American and English rules of legal costs allocation. Using the Nash Bargaining Game framework, we show that litigation can be a Pareto efficient outcome. The cooperative game framework allows us to examine how the institutional and market factors influence bargaining powers of plaintiff and defendant under different rules of legal cost allo...

We initiate a study of Nash bargaining games [Nas50] via combinatorial, polynomial time algorithms and we carry this program over to solving nonsymmetric bargaining games of Kalai [Kal77] as well. Since the solution to a Nash bargaining game is also the optimal solution to the corresponding convex program, this involves obtaining a combinatorial algorithm for the latter. This in turn can be vie...

It is widely accepted among axiomatic bargaining theorists that if one bargainer is more risk averse than a second, the second will be a tougher bargaining opponent than the first against all opponents. We argue that this relationship between risk aversion and bargaining toughness is both highly fragile, and more nuanced than previously articulated. In the Nash and Kalai-Smorodinsky bargaining ...

We attempt to open a path to the comparative analysis of criminal procedure by superimposing the efficiency principle onto an adversarial system characterized by an aversion to false convictions and an inquisitorial system characterized by a desire to justly punish the guilty. We begin with a general model of plea bargaining, embed it in a larger framework that addresses the costs of adjudicati...

Tete-a-Tete, and Kasbah—which facilitate price negotiations between buyers and sellers.1,2 Research shows that people might actually prefer shopping online at e-stores that offer the chance to negotiate prices, even if they don’t end up with the lowest price.3 Despite this clear opportunity, few electronic stores and online business-to-business operations currently offer automated bargaining. T...

In most existing models of bargaining it is assumed that traders know how much they value the object they are bargaining over. However, we observe in practice that economic agents often dedicate time and resources into learning the characteristics of goods and services they are considering to trade. For instance, imagine a consulting firm pitching a project to a potential customer. While the de...

We compare alternating-offer and demand bargaining models of the legislative bargaining process. These two approaches make very different predictions in terms of both ex-ante and ex-post distribution of payoffs, as well as about the role of the order of play. Experiments show that actual bargaining behavior is not as sensitive to the different bargaining rules as the theoretical predictions. We...

The organizational economics literature provides two primary arguments for vertically integrating a factor of production: incentives for investment in relationship-specific assets and improved coordination due to less bargaining activity (and other factors). Although there is now a well-established body of empirical work investigating investments in specific assets, there is almost no empirical...

We consider the problem of two agents bargaining over the relative price of two goods they are endowed with. They alternatingly exchange price offers and the utilities are discounted. The recipient of an offer can either accept it and choose the quantities to be traded, or reject and counteroffer a different relative price. We study the set of equilibria as discounting frictions vanish and find...

Nash’s (1950) theory and related theories of bargaining are frequently criticized for their lack of empirical content, since their predictions depend on the bargainers’ von :Jeumann-Morgenstern utility functions, which are not directly observable. The purpose of this letter is to suggest that an approach recently taken by Kurz (1977, 1978) in a somewhat different context may provide a remedy fo...