If one abstracts from specially organized markets like stock or commodity exchanges, (international) trade relies on bargaining between the interested parties. Whereas earlier the results of bargaining were seen as unpredictable or determined by an at most vaguely deened concept of (relative) bargaining power, it is simply a eld of application in view of game theory. Our discussion tries to ela...

In experiments it is typically found that many joint utility outcomes arise in any given unstructured bargaining game. This suggests using a positive unstructured bargaining concept that maps a bargaining game to a probability distribution over outcomes rather than to a single outcome. We show how to “translate” Nash’s bargaining axioms to apply to such distributional bargaining concepts. We th...

This paper introduces Nash bargaining into a search model in order to identify various channels through which agent gender affects selling price and selling time in the resale market for houses. The theory can be used in conjunction with the empirical model to determine agent bargaining power and how it is affected by dealing with the same or opposite sex agents. A decade of MLS data from Virgi...

Evidence shows that suppliers refrain from investing in energy efficiency (EE) measures because they fear that a buyer with greater bargaining power will use the EE-related cost reductions to push prices down, in the purchase bargaining process, and thereby further reduce the supplier’s profit margin. Suppliers are also discouraged from EE investment by the uncertainty associated with new techn...

We study Myerson’s incomplete information bargaining solution under the assumption of verifiable types. For the case of an informed principal, in which one individual has all the bargaining power, we provide exact characterizations both from the non cooperative and from the cooperative perspective. We then show that the axiomatic characterization can be extended to the case in which both indivi...

In this paper, we examine the optimal mechanism design problem of selling an indivisible object to one regular buyer and one speculator, where inter-buyer resale cannot be prohibited. The resale market is modeled as a stochastic ultimatum bargaining game between the two buyers. We fully characterize the optimal mechanism under general conditions. Surprisingly, in the optimal mechanism, the sell...