Construct · 1 fields · 2 citations

bargaining: a standalone construct

One name. One construct. A landmark on the map.

● anchor · game theory Nearest construct by meaning·not indexed
bargaining1 CONSTRUCTBargainingNASH · 1950

A single standalone construct; nearby constructs are located against it in the Collider. Tap a field for its definition, unit, and measures.

Game theory

How two parties split a surplus they can only get by agreeing

The bargaining problem asks how two parties divide the gains from an agreement when failing to agree leaves both at a worse disagreement point. Nash's 1950 The bargaining problem took an axiomatic route, showing that a short list of reasonable conditions singles out the split that maximizes the product of the players' utility gains over the disagreement point. Rubinstein's 1982 Perfect equilibrium in a bargaining model took the strategic route, deriving a unique division from a game of alternating offers in which impatience drives agreement. The referent is the division of a jointly created surplus, and these two approaches (axiomatic and non-cooperative) are the twin pillars of bargaining theory.[1][2]

Unit
The division of surplus the parties agree on, relative to the disagreement point
Recovery means
Not applicable
Measured by
Derived either axiomatically (the split maximizing the Nash product) or strategically (the subgame-perfect outcome of alternating offers)

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Nearby constructs

adhesion4 fields · 4 citationsjingle · one word, four constructsagreement4 fields · 7 citationsjingle · one word, four constructsbrinkmanship1 fields · 1 citationsanchor · strategy

References

  1. Nash, J. F. (1950). The bargaining problem. Econometrica, 18(2), 155–162. https://doi.org/10.2307/1907266
  2. Rubinstein, A. (1982). Perfect equilibrium in a bargaining model. Econometrica, 50(1), 97–109. https://doi.org/10.2307/1912531

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