ROLE OF EXTERNAL SEARCH IN BILATERAL BARGAINING.

Shirish D. Chikte*, Sudhakar D. Deshmukh

*Corresponding author for this work

Research output: Contribution to journalArticle

13 Scopus citations

Abstract

We consider the problem of bargaining between two individuals who can also search for possible alternatives to each other's offers. We explicitly incorporate the search activity into the process of bargaining: a disagreement in bargaining will lead each individual to search for an outside offer in the hope of improving his future bargaining position and attaining a more favorable outcome. We model the interlaced phases of bargaining and search over time as an extensive noncooperative game. We characterize the associated subgame-perfect equilibrium outcome and strategies. Finally, we show that superior search ability yields an individual a more favorable outcome and hence represents a greater bargaining strength.

Original languageEnglish (US)
Pages (from-to)198-205
Number of pages8
JournalOperations Research
Volume35
Issue number2
DOIs
StatePublished - 1987

ASJC Scopus subject areas

  • Computer Science Applications
  • Management Science and Operations Research

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