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Threshold Value: How Binding Thresholds Affect the Outcome of a Negotiation
Author(s) -
THORON SYLVIE
Publication year - 2011
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/j.1467-9779.2011.01524.x
Subject(s) - outcome (game theory) , negotiation , value (mathematics) , microeconomics , affect (linguistics) , constraint (computer aided design) , economics , mathematical economics , psychology , mathematics , statistics , communication , political science , geometry , law
Abstract The objective of this paper is to give the prospective outcome or “prospect” of a negotiation when the players’ value can only be realized if a certain threshold is reached. A threshold is usually defined as a certain total level of contribution. Here, I define a threshold in a cooperative game by the players who are necessary to reach it. It can take different forms such as a certain number of players, or certain coalitions of players. An important example is the minimum participation constraint in international environmental agreements. A value is proposed, which is defined for a given game and a given threshold. The threshold players may bear a commitment cost which decreases the benefit they can obtain from the negotiation.