The time-preference Nash solution

We give an axiomatic characterization of the Time-Preference Nash Solution, a bargaining solution that is applied when the underlying preferences are defined over streams of physical outcomes. This bargaining solution is similar to the ordinal Nash solution introduced by Rubinstein, Safra, and Thomson (1992), but it gives a different prediction when the set of physical outcomes is a set of lotteries.

The Time-Preference Nash Solution

We give an axiomatic characterization of the Time-Preference Nash Solution, a bargaining solution that is applied when the underlying preferences are defined over streams of physical outcomes. This bargaining solution is similar to the ordinal Nash solution introduced by Rubinstein, Safra and Thomson (1992), but it gives a different prediction when the set of physical outcomes is a set of lotteries.bargaining, ordinal Nash solution.

Modeling Oligopolistic Price Adjustment in Micro Level Panel Data

Consumer prices in many markets are persistently dispersed both across retail outlets and over time. While the cross sectional distribution of prices is stable, individual stores change their position in the distribution over time. It is a challenge to model oligopolistic price adjustment to capture these features of consumer markets. In belief based models of price adjustment stores react to expected profits. The expectations are based on the observed vector of market prices in the previous periods. In a reinforcement model of price adjustment, if a strategy has proven fruitful in the past, it is apt to be the strategy relied upon at the present. We collect price data on a homogeneous consumer product in Israel. We estimate the structural parameter of the models. We find that the reinforcement model describes the data better than the belief based models. ZUSAMMENFASSUNG - ( Modeling Oligopolistic Price Adjustment in Micro Level Panel Data) Preise für viele Konsumgüter sind weit verteilt. Dies gilt sowohl für die Verteilung über die Zeit als auch für die Verteilung zwischen den Verkaufsstellen. Während die Querschnittsverteilung der Preise stabil ist, wechseln die einzelnen Verkaufsstellen ihre Position in der Verteilung über die Zeit. Es stellt eine Herausforderung dar, diese Merkmale der Märkte für Konsumgüter zu modellieren. Im Vermutungslernen bilden die Verkaufstätten Erwartungen über das zukünftige Preissetzungsverhalten der Konkurrenz. Die Erwartungen basieren auf dem vorherigen Entscheidungsverhalten der Konkurrenz. Im Bekräftigungslernen werden erfolgreiche Strategien gerne wiederholt. Preisdaten eines homogenen Gutes in Israel werden erhoben. Die strukturellen Parameter der Modelle werden geschätzt. Bekräftigungslernen beschreibt das tatsächliche Entscheidungsverhalten besser als Vermutungslernen.Experiments; Information; Learning

A Characterization of the Nash Bargaining Solution

We characterize the Nash bargaining solution replacing the axiom of Independence of Irrelevant Alternatives with three independent axioms: Independence of Non-Individually Rational Alternatives, Twisting and Disagreement Point Convexity. We give a non-cooperative bargaining interpretation to this last axiom.bargaining problem; Nash solution; axiomatic characterization; Independence of Non-Individually Rational Alternatives; Twisting; Disagreement Point Convexity

Bargaining with an Agenda

We propose a new framework for bargaining in which the process follows an agenda. The agenda is represented by a family, parameterized by time, of increasing sets of joint utilities for possible agreements. This is in contrast to the single set used in the standard framework. The set at each time involves all possible agreements on the issues discussed up to that time. A \emph{bargaining solution} for an agenda specifies a path of agreements, one for each time. We characterize axiomatically a solution that is ordinal, meaning that it is covariant with order- preserving transformations of the utility representations. It can be viewed as the limit of a step-by-step bargaining process in which the agreement point of the last negotiation becomes the disagreement point for the next. The stepwise agreements may follow the Nash solution, the Kalai-Smorodinsky solution or many others, and the ordinal solution will still emerge as the steps tend to zero. Shapley showed that ordinal solutions exist for the standard framework for three players but not for two; the present framework generates an ordinal solution for any number of bargainers, in particular for two.bargaining, ordinal utility

Can Higher Bonuses Lead to Less Effort? Incentive Reversal in Teams

Conventional wisdom suggests that an increase in monetary incentives should induce agents to exert higher effort. In this paper, however, we demonstrate that this may not hold in team settings. In the context of sequential team production with positive externalities between agents, incentive reversal might occur: an increase in monetary incentives (either because rewards increase or effort costs decrease) may lead agents to exert lower effort in the completion of a joint task – even if agents are fully rational, self-centered money maximizers. Herein we discuss this seemingly paradoxical phenomenon and report on two experiments that provide supportive evidence.incentives, incentive reversal, team production, externalities, laboratory experiments, personnel economics