A new mechanism for resolving bargaining impasses between risk averse parties - Archive ouverte HAL
Article Dans Une Revue International Game Theory Review Année : 2016

A new mechanism for resolving bargaining impasses between risk averse parties

Résumé

In a sequential bargaining game framework with complete information and no discounting, this paper proposes a mechanism in the spirit of a final offers arbitration (FOA). At each step, two parties may stop negotiating in order to implement a lottery between the two current proposals or go on making new proposals. A crucial difference with the FOA is that the list of past proposals is recorded and used by the mechanism. Once a lottery has been implemented, the parties can reject the offer which has been drawn and go back to a lottery between proposals made in the past. At the dominant subgame perfect equilibrium the two parties make gradual concessions leading to a final agreement which coincides with the Raiffa solution. The main incentive to reach an agreement comes from risk-aversion. The necessity to make step by step concessions generates evolving disagreement points and gradualism.
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Dates et versions

hal-01394208 , version 1 (08-11-2016)

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  • HAL Id : hal-01394208 , version 1

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Emily Tanimura, Sylvie Thoron. A new mechanism for resolving bargaining impasses between risk averse parties. International Game Theory Review, 2016. ⟨hal-01394208⟩
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