A Note on the Zeuthen-Harsanyi Theory of Bargaining

Bibliographic Data

ID10071470
AuthorsVincent P Crawford (0000-0003-0532-0305, Department of Economics University of California, San Diego, corresponding author)
Year1980
Volume24
Issue3
Pages525-535
Publication date1980-09-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueJournal of Conflict Resolution (JOURNAL)
Journal identifiersISSN: 0022-0027 • E-ISSN: 1552-8766
PublisherSAGE Publishing (PUBLISHER • US)
DOI10.1177/002200278002400307
OpenAlexW1984059809
LanguageEN
References cited12

This article shows that the conclusions of the Zeuthen-Harsanyi theory of bargaining, which is widely regarded as an alternative justification for Nash's solution of the bargaining problem, can be extremely sensitive to small changes in the assumption that both bargainers have identical perceptions of the costs of disagreement. Whether this is the case depends on whether bargainers' priors about those costs are optimistic, in a sense made precise in this article. An axiomatic framework for modeling bargaining outcomes when bargainers perceive the costs of disagreement differently is proposed, and it is shown that a class of solutions that generalize Nash's satisfy the natural generalizations of Nash's axioms

Axiom · Axiomatic system · Bargaining problem · Bayesian probability · Class (philosophy · Economics · Mathematical economics · Nash equilibrium · Prior probability · Artificial Intelligence · Auction Theory and Applications · Computer Science · Game Theory and Voting Systems · Law, Economics, and Judicial Systems · Mathematics

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