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Ten rules of bargaining sequences A boundedly rational model of coalition bargaining in characteristic function games

  • Wulf Albers
Conference paper

Abstract

The paper presents a first outline of a model of the bargaining process in characteristic function games. It is based on the conclusions from more than 1000 experimental games with free communication with 3, 4, 5 and sometimes more players. The essence of this approach is, that the bargaining process can be modeled as a sequence of states or proposals, each of which dominates the preceding one. And, that there are certain laws or rules of boundedly rational behavior, according to which players behave when they change coalitions. These rules are presented.

The concept is based on the following behavioral aspects:
  • structure of sequences of proposals (Rule 1)

  • phenomena of prominence (Rules 2, 3)

  • the phenomenon of reciprocal loyalty (Rules 4, 5)

  • conclusions from actions of others (attributed demands, Rule 6)

These phenomena restrict possible schemes of arguing to chains of proposals of which each dominates the preceding one. The space of all these chains is ordered by the natural inclusion of chains. It is a tree-shaped, finite set. On this space strategic considerations of the players are modeled by
  • the recursive definition of stable states (Rule 7),

  • the opportunity to break a coalition, and thereby force the game back to a former state of the process (Rule 8),

  • principles of fairness, when forming the coalition of all players, and the stability of this coalition (Rules 9, 10).

Examples illustrate and motivate the conditions, and show phenomena that cannot be explained by traditional solution concepts.

Keywords

Coalition Formation Coalition Structure Payoff Distribution Grand Coalition Bargaining Process 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer-Verlag Berlin · Heidelberg 1984

Authors and Affiliations

  • Wulf Albers
    • 1
  1. 1.Institute of Mathematical EconomicsUniversity of BielefeldBielefeldGermany

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