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THE VALUE OF TIME IN BARGAINING NEGOTIATIONS: A DYNAMIC MODEL *
Author(s) -
Contini Bruno
Publication year - 1970
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/j.1467-6435.1970.tb02557.x
Subject(s) - negotiation , bargaining power , economics , outcome (game theory) , microeconomics , mathematical economics , preference , bargaining problem , function (biology) , value (mathematics) , process (computing) , variable (mathematics) , pareto principle , pareto optimal , computer science , mathematics , mathematical optimization , operations management , multi objective optimization , statistics , political science , mathematical analysis , evolutionary biology , biology , operating system , law
SUMMARY This paper deals with a model of the bargaining process in which time is an explicit variable in the utility function of each bargainer. The model explains two phenomena that are not derivable from simpler models but that seem to occur in reality and are part of most intuitive understanding of the bargaining process: 1. The outcome of a bargaining process may be stable (agreed upon by both parties) and yet not be efficient (Pareto‐optimal or on the contract curve). 2. Time preference is an important determinant of the so‐called bargaining power. The lower any given bargainer's time preference, the better off‐in relative terms‐will he emerge from the negotiated solution.