Theories Bargaining

1 theories

1.1 behavioral theory
1.2 game theory
1.3 bargaining , posted prices in retail markets
1.4 processual theory
1.5 integrative theory
1.6 narrative theory
1.7 automated bargaining
1.8 anchor pricing

theories

medina tripoli, libya


behavioral theory

the personality theory in bargaining emphasizes type of personalities determine bargaining process , outcome. popular behavioral theory deals distinction between hard-liners , soft-liners. various research papers refer hard-liners warriors, while soft-liners shopkeepers. varies region region. bargaining may take place more in rural , semi-urban areas in metro city.

game theory

bargaining games refer situations 2 or more players must reach agreement regarding how distribute object or monetary amount. each player prefers reach agreement in these games, rather abstain doing so. however, each prefers agreement favour interests. examples of such situations include bargaining involved in labour union , directors of company negotiating wage increases, dispute between 2 communities distribution of common territory, or conditions under 2 countries agree on nuclear disarmament. analyzing these kinds of problems looks solution specifies component in dispute corresponds each party involved.

players in bargaining problem can bargain objective whole @ precise moment in time. problem can divided parts of whole objective become subject bargaining during different stages.

in classical bargaining problem result agreement reached between interested parties, or status quo of problem. clear studying how individual parties make decisions insufficient predicting agreement reached. however, classical bargaining theory assumes each participant in bargaining process choose between possible agreements, following conduct predicted rational choice model. particularly assumed each player s preferences regarding possible agreements can represented von neumann–morgenstern utility theorem function.

nash [1950] defines classical bargaining problem being set of joint allocations of utility, of correspond players obtain if reach agreement, , represents if failed so.

a bargaining game 2 players defined pair (f,d) f set of possible joint utility allocations (possible agreements), , d disagreement point.

for definition of specific bargaining solution usual follow nash s proposal, setting out axioms solution should satisfy. of frequent axioms used in building of bargaining solutions efficiency, symmetry, independence of irrelevant alternatives, scalar invariance, monotonicity, etc.

the nash bargaining solution bargaining solution maximizes product of agent s utilities on bargaining set.

the nash bargaining solution, however, deals simplest structure of bargaining. not dynamic (failing deal how pareto outcomes achieved). instead, situations structure of bargaining game important, more mainstream game theoretic approach useful. can allow players preferences on time , risk incorporated solution of bargaining games. can show how details can matter. example, nash bargaining solution prisoners dilemma different nash equilibrium.

bargaining , posted prices in retail markets

retailers can choose sell @ posted prices or allow bargaining: selling @ public posted price commits retailer not exploit buyers once enter retail store, making store more attractive potential customers, while bargaining strategy has advantage allows retailer price discriminate between different types of customer. in markets, such automobiles , expensive electronic goods, firms post prices open haggling consumers. when proportion of haggling consumers goes up, prices tend rise.

processual theory

this theory isolates distinctive elements of bargaining chronology in order better understand complexity of negotiating process. several key features of processual theory include:

bargaining range
critical risk
security point

integrative theory

integrative bargaining (also called interest-based bargaining, win-win bargaining ) negotiation strategy in parties collaborate find win-win solution dispute. strategy focuses on developing mutually beneficial agreements based on interests of disputants. interests include needs, desires, concerns, , fears important each side. underlying reasons why people become involved in conflict.

integrative refers potential parties interests [combined] in ways create joint value or enlarge pie. potential integration exists when there multiple issues involved in negotiation. because parties must able make trade-offs across issues in order both sides satisfied outcome.

narrative theory

a different approach conceptualizing bargaining co-construction of social narrative, narrative, rather economic logic drives outcome.

automated bargaining

when bargaining situation complex, finding nash equilibrium difficult using game theory. evolutionary computation methods have been designed automated bargaining, , demonstrated efficient , effective approximating nash equilibrium.

anchor pricing

the anchor price first offer made during bargaining procedure. first offer sets first conditions pricing, thereby anchoring resulting outcome of transaction.