This paper derives the Generalized Nash Bargaining Solution for two-player games where each player has the option of postponing bargaining till a future period. This option endogenously determines the threat points of the initial game. The outcome is compared with the case where there is no such option, and with the usual Rubinstein bargaining game where one offer per period is made. JEL Classi...

The theory of bargaining as formulated by Nash (1950, 1953) has developed along two routes. One is axiomatic (e.g., Nash 1950; Kalai and Smorodinsky 1975; Roemer 1988). Here, the negotiation process underlying the bargaining is only implicit. The idea is to try to characterize the negotiated outcome (the solution) through a set of axioms without formally modeling the process. The advantages of ...

This paper considers the “negotiation game” (Busch and Wen [4]) which combines the features of two-person alternating offers bargaining and repeated games. Despite the forces of bargaining, the negotiation game in general admits a large number of equilibria some of which involve delay in agreement and inefficiency. In order to isolate equilibria in this game, we explicitly consider the complexi...

We provide a model of coalitional bargaining with claims in order to solve games with non-transferable utilities and externalities. We show that, for each such game, payoff configurations exist which will not be renegotiated. In the ordinal game derived from these payoff configurations, we can find a partition in which no group of players has an incentive to jointly change their coalitions. For...

In experiments it is typically found that many joint utility outcomes arise in any given unstructured bargaining game. This suggests using a positive unstructured bargaining concept that maps a bargaining game to a probability distribution over outcomes rather than to a single outcome. We show how to “translate” Nash’s bargaining axioms to apply to such distributional bargaining concepts. We th...

This sequel paper analyzes other selected methodologies and applications from the theory of continuous-time (real) option games – the combination of real options and game theory. In the first paper (Dias & Teixeira, 2003), we analyzed preemption and collusion models of duopoly under uncertainty. In this second paper we focus on models of oligopoly under uncertainty, war of attrition under uncer...

As an attempt to fill the gap between psychological studies on negotiations and game-theoretical studies on bargaining, I provide a new conception, that of the concession-making strategy. This type of strategy is formally defined as a pattern of consecutive concessions in bargaining. Because such a pattern is a product of decision makers' cognitive and motivational processes, this framework is ...