Bargaining Costs and Rational Behavior

A Simple Model

Bibliographic Data

ID6284928
AuthorsMarek P Hessel (Fordham University, corresponding author), Marek Hessel (Graduate School of Business Administration Fordham University)
Year1981
Volume25
Issue3
Pages535-558
Publication date1981-09-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueJournal of Conflict Resolution (JOURNAL)
Journal identifiersISSN: 0022-0027 • E-ISSN: 1552-8766
PublisherSAGE Publications Inc (PUBLISHER)
DOI10.1177/002200278102500307
OpenAlexW2154127073
LanguageEN
Citations received3
References cited7

This article presents a discussion of the effects of bargaining costs on the behavior of rational bargainers. Rationality is defined so as to reflect the bargainers' recognition of cooperative as well as conflictual aspects of bargaining. Bargaining is viewed as a sequential non-zero-sum game, which allows the bargainers to communicate through exchanges of their demands. It is shown that if the communication process were entirely costless, no need for communication would arise. The presence of bargaining costs makes each bargainer's behavior vulnerable to his opponent's actions, and thus opens the way for bargaining. As a result, a rational bargainer may make demands deviating from his expectations of the final terms of agreement. Rational behavior becomes, in a sense, unpredictable and may not suffice to reach an agreement. Some implications of the analysis are discussed

Adversary · Computer security · Economics · Mathematical economics · Microeconomics · Political science · Process (computing · Rationality · Zero (linguistics · Auction Theory and Applications · Computer Science · Game Theory and Voting Systems · Law, Economics, and Judicial Systems

Tools

Open DOISci-Hub