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Rubinstein Bargaining with Other-Regarding Preferences

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  • Martin A. Leroch

    (Institute of Political Science, Unit Politics and Economy, Johannes Gutenberg-Universitaet Mainz, Germany)

Abstract

While classic bargaining theory abstracts from other-regarding motives, bargaining processes often take place among parties who care about each other's payo . In this paper, I analyze how other- regarding preferences a ect the outcome, duration, and use of means to harm the other in reference to a Rubinstein bargain- ing game. It is found that agents regarding each other's payo negatively will reach less equal outcomes, take longer to reach this outcome and are more likely to harm each other if they have means available to do so.

Suggested Citation

  • Martin A. Leroch, 2015. "Rubinstein Bargaining with Other-Regarding Preferences," Working Papers 1509, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz.
    • Handle: RePEc:jgu:wpaper:1509
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    File URL: https://download.uni-mainz.de/RePEc/pdf/Discussion_Paper_1509.pdf
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    References listed on IDEAS

    as
    1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
    2. Slantchev, Branislav L., 2003. "The Power to Hurt: Costly Conflict with Completely Informed States," American Political Science Review, Cambridge University Press, vol. 97(1), pages 123-133, February.
    3. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 817-868.
    4. Fernandez, Raquel & Glazer, Jacob, 1991. "Striking for a Bargain between Two Completely Informed Agents," American Economic Review, American Economic Association, vol. 81(1), pages 240-252, March.
    5. Shaked, Avner & Sutton, John, 1984. "Involuntary Unemployment as a Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 52(6), pages 1351-1364, November.
    6. Kohler, Stefan, 2012. "Envy can promote more equal division in alternating-offer bargaining," MPRA Paper 40761, University Library of Munich, Germany.
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    Cited by:

    1. Stefan Kohler & Karl H. Schlag, 2019. "Inequality Aversion Causes Equal Or Unequal Division In Alternating‐Offer Bargaining," Bulletin of Economic Research, Wiley Blackwell, vol. 71(1), pages 47-57, January.

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