An Ethical Interpretation of the Nash Choice Rule

This paper provides an ethical intepretation of the Nash choice rule. In a setting in which (cardinal) utilities are interpersonally comparable, this procedure is characterised by an impartiality requirement and by the assumption that choices are not responsive to the agents' relative ability to convert resources into utility.     

A Demonstration of Methods for Studying Negotiations Between Physicians and Health Care Managers*

Decision analysis was used to study negotiations in the health care context. This paper found that analytical methods could answer several important questions related to complex negotiations, including whether contracts promote the interest of both parties, whether a decision aid could better meet the priorities of both parties, and whether one negotiator is more successful than the other in repeated negotiations. The paper concluded that micro-health care negotiations can be traced and studied with existing mathematical theories of negotiation.     

Negotiating control and achieving performance in international joint ventures: A conceptual model

Adapting well-established organization theories to international joint ventures (IJVs), this paper develops an overarching theoretical model of the determinants and effects of parent control of IJVs from an interpartner bargaining power perspective. Drawing upon power dependence, transaction costs, and agency theories, we argue that the relative bargaining power between IJV partners serves as the key determinant of control structure, and that control exerts a direct effect on the venture's performance. In addition, government influence and interpartner working relationship are critical factors that complicate the linkage between control and performance but may help to explain past conflicting results. Propositions regarding these relationships are formed for future empirical test, and implications and directions for future research are provided.     

Bargaining,Reputation, and Equilibrium Selection in Repeated Games with Contracts

Consider a two‐person intertemporal bargaining problem in which players choose actions and offers each period, and collect payoffs (as a function of that period's actions) while bargaining proceeds. This can alternatively be viewed as an infinitely repeated game wherein players can offer one another enforceable contracts that govern play for the rest of the game. Theory is silent with regard to how the surplus is likely to be split, because a folk theorem applies. Perturbing such a game with a rich set of behavioral types for each player yields a specific asymptotic prediction for how the surplus will be divided, as the perturbation probabilities approach zero. Behavioral types may follow nonstationary strategies and respond to the opponent's play. In equilibrium, rational players initially choose a behavioral type to imitate and a war of attrition ensues. How much should a player try to get and how should she behave while waiting for the resolution of bargaining? In both respects she should build her strategy around the advice given by the “Nash bargaining with threats” (NBWT) theory developed for two‐stage games. In any perfect Bayesian equilibrium, she can guarantee herself virtually her NBWT payoff by imitating a behavioral type with the following simple strategy: in every period, ask for (and accept nothing less than) that player's NBWT share and, while waiting for the other side to concede, take the action Nash recommends as a threat in his two‐stage game. The results suggest that there are forces at work in some dynamic games that favor certain payoffs over all others. This is in stark contrast to the classic folk theorems, to the further folk theorems established for repeated games with two‐sided reputational perturbations, and to the permissive results obtained in the literature on bargaining with payoffs as you go.     

The design of socially optimal decisions in a consensus scenario

Several situations of conflict between basic social principles can crop up during a consensus searching process. The majority principle and respect for minority groups is a possible example of a conflictive situation between two social principles. In this paper, we outline a specific consensus searching scenario, where individual preferences are expressed by “pairwise” comparison matrices. The set of compromise consensuses between the majority and minority principles is determined using a procedure based upon an adaptation of Yu's p-metric distances. Finally, we use three different theoretical approaches – utility theory, p-metric distance functions and bargaining theory – to obtain the social optimum from the set of compromise consensuses. The links and differences among the three approaches are analysed. Finally, the working of the proposed theoretical framework is illustrated with the help of a forestry case study.     

Nash Bargaining Theory,Nonconvex Problems and Social Welfare Orderings

In this paper we deal with the extension of Nash bargaining theory to nonconvex problems. By focussing on the Social Welfare Ordering associated with a bargaining solution, we characterize the symmetric Nash Bargaining Solution (NBS). Moreover, we obtain a unified method of proof of recent characterization results for the asymmetric single-valued NBS and the symmetric multivalued NBS, as well as their extensions to different domains.     

On the sharing of temporary parental leave: the case of Sweden

This paper views temporary parental leave (leave from work to take care of a sick child) as a household public good, produced with time inputs of the parents as the only input. Assuming equal productivities in the production of temporary parental leave and equal utility functions of the spouses, different household decision-making processes are applied to develop theoretical hypotheses on sharing that are thereafter tested empirically. The empirical estimations show that the decision-making process of the spouses can be explained by a Stackelberg model with male dominance. A stronger threat-point of the female is found to push the intra household allocation of temporary parental leave towards greater sharing between the spouses. In addition, an increase in the insurance ceiling will further sharing of temporary parental leave in some families, while reducing it in others.

Gender differences in bargaining with asymmetric information

We conduct an experiment on gender differences in bargaining with asymmetric information. Based on Abreu and Gul (2000), we introduce asymmetric information about commitments by inducing irrational types, who never back down from a fixed bargaining position. Bargaining behavior depends on whether gender is revealed or not. When gender is unknown, men are more likely to mimic irrational types than women, but this gender gap is eliminated when gender is known. Male-male pairs also experience longer delays than other pairs, but only when gender is revealed and only in pairs where one subject mimics the irrational type.     

Alternating-Offer Bargaining and Common Knowledge of Rationality

This paper reconsiders Rubinstein's alternating-offer bargaining game with complete information. We define rationalizability and trembling- hand rationalizability (THR) for multi-stage games with observed actions. We show that rationalizability does not exclude perpetual disagreement or delay, but that THR implies a unique solution. Moreover, this unique solution is the unique subgame perfect equilibrium (SPE). Also, we reconsider an extension of Rubinstein's game where a smallest money unit is introduced: THR rules out the non-uniqueness of SPE in some particular case. Finally, we investigate the assumption of boundedly rational players. Perpetual disagreement is excluded, but not delay. Furthermore, we cannot use the asymmetric Nash bargaining solution as an approximation of the alternating-offer bargaining model once the players are boundedly rational ones.