A tale of two bargaining solutions
type: Item
instance of: scholarly article
title: A tale of two bargaining solutions
zbMATH Open document ID: 1404.91124
author: Emin Karagözoğlu
author: Kerim Keskin
published in: Games
publication date: 2018-07-10T00:00:00Z
review text: Summary: We set up a rich bilateral bargaining model with four salient points (disagreement point, ideal point, reference point, and tempered aspirations point), where the disagreement point and the utility possibilities frontier are endogenously determined. This model allows us to compare two bargaining solutions that use reference points, the Gupta-Livne solution and the tempered aspirations solution, in terms of Pareto efficiency in a strategic framework. Our main result shows that the weights solutions place on the disagreement point do not directly imply a unique efficiency ranking in this bargaining problem with a reference point. In particular, the introduction of a reference point brings one more degree of freedom to the model which requires also the difference in the weights placed on the reference point to be considered in reaching an efficiency ranking.
Mathematics Subject Classification ID: 91B26
zbMATH DE Number: 6900971
zbMATH Keywords: aspiration points
zbMATH Keywords: bargaining problem
zbMATH Keywords: endogenous disagreement points
zbMATH Keywords: reference points
MaRDI profile type: Publication
full work available at URL: g6020161
OpenAlex ID: W1533308645
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DOI: 10.3390/G6020161
description: scientific article; zbMATH DE number 6900971