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Integrating Raiffa and Nash approaches to bargaining using interim agreements

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  • Chatterjee, Kalyan
  • Chaturvedi, Rakesh

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.

Suggested Citation

  • Chatterjee, Kalyan & Chaturvedi, Rakesh, 2024. "Integrating Raiffa and Nash approaches to bargaining using interim agreements," Games and Economic Behavior, Elsevier, vol. 146(C), pages 105-120.
    • Handle: RePEc:eee:gamebe:v:146:y:2024:i:c:p:105-120
    DOI: 10.1016/j.geb.2024.05.003
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    References listed on IDEAS

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    More about this item

    Keywords

    Bargaining; Nash bargaining solution; Raiffa's bargaining solution; Negotiation curve;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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