Integrating Raiffa and Nash approaches to bargaining using interim agreements

Kalyan Chatterjee and Rakesh Chaturvedi

Games and Economic Behavior, 2024, vol. 146, issue C, 105-120

Abstract: Raiffa's solution to the bargaining problem, outlined in Luce and Raiffa (1957), is the point where the negotiation curve - a sequence of points that constitute step-by-step improvements from the status quo in the feasible payoff space - meets (possibly in the limit) the efficient boundary of the feasible region. A bargaining model with interim agreements yields a negotiation curve in equilibrium (in the spirit of Raiffa), and as the bargaining frictions disappear, the Raiffa path of payoffs converges to the Nash solution.

Keywords: Bargaining; Nash bargaining solution; Raiffa's bargaining solution; Negotiation curve (search for similar items in EconPapers)
JEL-codes: C71 C78 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:146:y:2024:i:c:p:105-120

DOI: 10.1016/j.geb.2024.05.003

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