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Revising claims and resisting ultimatums in bargaining problems

Johannes Spinnewijn and Frans Spinnewyn

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We propose a simple mechanism which implements a unique solution to the bargaining problem with two players in subgame-perfect equilibrium. The mechanism incorporates two important features of negotiations; players can revise claims in an attempt to reach a compromise or pursue their claims in an ultimate take-it-or-leave-it offer. Players restrain their claims to avoid a weak bargaining position or their resistance to uncompromising behavior to acquire leadership. The Nash solution and the Kalai–Smorodinsky solution are implemented in the extreme cases when respectively no and all revisions are allowed.

Keywords: bargaining solutions; Nash program; ultimatums (search for similar items in EconPapers)
JEL-codes: C78 D74 (search for similar items in EconPapers)
Date: 2015-06
New Economics Papers: this item is included in nep-exp, nep-gth, nep-pr~ and nep-mic
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Published in Review of Economic Design, June, 2015, 19(2), pp. 91-116. ISSN: 1434-4742

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Related works:
Journal Article: Revising claims and resisting ultimatums in bargaining problems (2015) Downloads
Working Paper: Revising claims and resisting ultimatums in bargaining problems (2008) Downloads
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