Events at CERGE-EI

Thursday, 17 March, 2016 | 16:30 | Micro Theory Research Seminar

Prof. Marco LiCalzi (U. of Venice) “Target-based solutions for Nash bargaining”

Prof. Marco LiCalzi

Ca' Foscari University of Venice, Italy

Authors: Lorenzo Bastianello and Marco LiCalzi

Abstract: We revisit the Nash model for two-person bargaining. A mediator knows agents' ordinal preferences over feasible proposals, but has incomplete information about their acceptance thresholds. We provide a behavioural characterisation under which the mediator recommends a proposal that maximises the probability that bargainers strike an agreement. Some major solutions are recovered as special cases; in particular, we offer a straightforward interpretation for the product operator underlying the Nash solution.

Keywords: cooperative bargaining, target-based preferences, Nashsolution, egalitarianand utilitarian solutions, mediation, copulas.

JEL ClassificationNumbers:  C78, D81, D74.

Full Text:  Target-based solutions for Nash bargaining