Modelling Negotiated Decision Making: a Multilateral, Multiple Issues, Non-Cooperative Bargaining Model with Uncertainty

The relevance of bargaining to everyday life can easily be ascertained, yet the study of any bargaining process is extremely hard, involving a multiplicity of questions and complex issues. The objective of this paper is to provide new insights on some dimensions of the bargaining process – asymmetries and uncertainties in particular – by using a non-cooperative game theory approach. We develop a computational model which simulates the process of negotiation among more than two players, who bargain over the sharing of more than one pie. Through numerically simulating several multiple issues negotiation games among multiple players, we identify the main features of players’ optimal strategies and equilibrium agreements. As in most economic situations, uncertainty crucially affects also bargaining processes. Therefore, in our analysis, we introduce uncertainty over the size of the pies to be shared and assess the impacts on players’ strategic behaviour. Our results confirm that uncertainty crucially affects players’ behaviour and modify the likelihood of a self-enforcing agreement to emerge. The model proposed here can have several applications, in particular in the field of natural resource management, where conflicts over how to share a resource of a finite size are increasing.bargaining, non-cooperative game theory, simulation models, uncertainty

Modelling Negotiated Decision Making: a Multilateral, Multiple Issues, Non-Cooperative Bargaining Model with Uncertainty

The relevance of bargaining to everyday life can easily be ascertained, yet the study of any bargaining process is extremely hard, involving a multiplicity of questions and complex issues. The objective of this paper is to provide new insights on some dimensions of the bargaining process – asymmetries and uncertainties in particular – by using a non-cooperative game theory approach. We develop a computational model which simulates the process of negotiation among more than two players, who bargain over the sharing of more than one pie. Through numerically simulating several multiple issues negotiation games among multiple players, we identify the main features of players’ optimal strategies and equilibrium agreements. As in most economic situations, uncertainty crucially affects also bargaining processes. Therefore, in our analysis, we introduce uncertainty over the size of the pies to be shared and assess the impacts on players’ strategic behaviour. Our results confirm that uncertainty crucially affects players’ behaviour and modifies the likelihood of a self-enforcing agreement to emerge. The model proposed here can have several applications, in particular in the field of natural resource management, where conflicts over how to share a resource of a finite size are increasing.Bargaining, Non-Cooperative Game Theory, Simulation Models, Uncertainty

Bargaining under Large Risk - An Experimental Analysis -

We present an experimental study to learn about behavior in bargaining situations under large risks. In order to implement realistic risks involved in the field, we calibrate the experimental parameters from an environment involving substantial variation in profits, the motion picture industry. The leading example is the production of a movie that may give rise to a sequel, so actors and producers negotiate sequentially. We analyze the data in light of alternative behavioral approaches to understanding bargaining behavior under large risk.Bargaining, Large Risk, Equity, Experiments, Calibration

Non-unitary Models of Household Behavior: A Survey of the Literature

This article considers non-unitary models of household behavior. These models suppose explicitly that households consist of a number of different members with preferences that are different from each other. They can be split up into two principal categories: cooperative (or collective) models, in which the allocations are supposed to be Pareto efficient; and non-cooperative (or strategic) models which are based on the concept of Cournot-Nash equilibrium. The demand functions that describe household behavior in these models are subject to constraints that differ from the traditional Slutsky conditions. In addition, in a certain number of specific cases, the preferences of the different household members can be identified from observable behavior.households, collective model, strategic model, testability, identification

Testing Nash-bargaining household models with time-series data

This paper uses a “natural experiment” in Canadian divorce law reform to discriminate empirically between unitary and Nash-bargained models of the household. Using time-series data from three Canadian provinces, it demonstrates that following landmark divorce law reforms in the 1970s—reforms that led to improvements in women's expected settlement upon divorce in Ontario and British Columbia, suicide rates for older, married women in these provinces registered a sharp decline. Similar declines were not registered for younger, unmarried women or men in Ontario and British Columbia, nor for older, married women in Quebec, where the legal basis for divorce did not change. These results are consistent with Nash-bargained models of the household but not with the unitary model.Gender ,Households Models. ,Canada Social policy. ,Gender issues. ,Household resource allocation ,