This paper offers a noncooperative behaviourally-founded solution of the complete information bargaining problem where two impatient individuals wish to divide a unit pie. We formulate the game in continuous time, with unrestricted timing and content of offers. Reprising experimental work from 1960, we introduce and explore aspirational equilibrium — a Markovian refinement of subgame perfection...

A multicoalitional bargaining problem is a non-transferable utility game and for each coalition, a bargaining rule. We look for ordinally invariant solutions to such problems and discover a subrule of Bennett’s (1997, Games Econ. Behav. 19, 151–179) that satisfies the property. On a subclass of problems that is closely related to standard bargaining problems and allocation problems with majorit...

Whereas orthodox game theory relies on the unrealistic assumption of (commonly known) perfect rationality, the participants in game-playing experiments are, at best, rational only within limits. This makes it necessary to supplement orthodox game theory with a behavioral theory of game playing. This contribution first points out that this applies also to (one person-) decision theory. After rev...

This work investigates how bargaining power affects negotiations between manufacturers and reverse logistics providers in reverse supply chains under government intervention using a novel three-stage reverse supply chain model for two scenarios, a reverse logistics provider alliance and no reverse logistics provider alliance. Utilizing the asymmetric Nash bargaining game, this work seeks equili...

In Bargaining Theory players di¤er from one another in either their valuation for the negotiated object and/or their time preferences. We suggest a model that incorporates "bargaining ability" as another source for heterogeneity across players. This bargaining ability for the buyer determines how many o¤ers he will be able to turn down before he walks away. For the seller this ability determine...

Standard contract theory assumes that the principal holds all of the bargaining power. By implementing alternating o¤er and strategic delay, we transform the one-shot contracts design game into the in…nite-horizon contracts bargaining game. The uninformed principal and the informed agent bargain over multiple dimensions. Our paper presents the following new results. When the di¤erence between t...

Climate negotiations occur against the backdrop of increasing collective risk: each failure to agree on how to share the costs of climate change mitigation increases the odds of significant economic loss for the negotiating parties. Nonetheless, no existing climate bargaining model includes this characteristic feature. We introduce a novel bargaining game that incorporates collective risk, and ...

Experiments on bargaining games have repeatedly shown that subjects fail to use backward induction, and that they only rarely make demands in accordance with the subgame perfect equilibrium. In a recent paper, we proposed an alternative model, termed 'economic harmony' in which we modified the individual's utility by defining it as a function of the ratio between the actual and aspired pay-offs...

This note reconsiders the Rubinstein bargaining game under assumption that a rejected offer is only costly to proposer who made offer. It shown then, classic result of Shaked that, in multilateral version this game, every division good can be sustained SPE no longer holds. Specifically, there are many SPE, but players’ (expected) payoffs unique. The further leads responder advantage.