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Alternating-Offers Bargaining with Nash Bargaining Fairness Concerns

The Rubinstein alternating-offers bargaining game is reconsidered, where players show fairness concerns and their fairness references are characterized by the Nash bargaining solution. The objective of this paper is to explore the impact of fairness concerns in the alternating-offer bargaining game....

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Autores principales: Feng, Zhongwei, Li, Fangning, Tan, Chunqiao
Formato: Online Artículo Texto
Lenguaje:English
Publicado: MDPI 2023
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9951905/
https://www.ncbi.nlm.nih.gov/pubmed/36829353
http://dx.doi.org/10.3390/bs13020124
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author Feng, Zhongwei
Li, Fangning
Tan, Chunqiao
author_facet Feng, Zhongwei
Li, Fangning
Tan, Chunqiao
author_sort Feng, Zhongwei
collection PubMed
description The Rubinstein alternating-offers bargaining game is reconsidered, where players show fairness concerns and their fairness references are characterized by the Nash bargaining solution. The objective of this paper is to explore the impact of fairness concerns in the alternating-offer bargaining game. Alternating-offer bargaining with fairness concerns is developed. We construct a subgame perfect equilibrium and show its uniqueness. Then, it is shown that players’ payoffs in the subgame perfect equilibrium are positively related to their own fairness concern coefficient and bargaining power and negatively to the opponents’ fairness concern coefficient. Moreover, it is shown that the limited equilibrium partition depends on the ratio of discount rates of the two players when the time lapse between two offers goes to zero. Finally, the proposed model is applied to the bilateral monopoly market of professional basketball players, and some properties of equilibrium price are shown. Our result provides the implication that players should carefully weigh their own fairness concerns, bargaining power and fairness concerns of their opponents, and then make proposals, rather than simply follow the suggestion that the proposal at the current stage is higher than that at the past stages.
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spelling pubmed-99519052023-02-25 Alternating-Offers Bargaining with Nash Bargaining Fairness Concerns Feng, Zhongwei Li, Fangning Tan, Chunqiao Behav Sci (Basel) Article The Rubinstein alternating-offers bargaining game is reconsidered, where players show fairness concerns and their fairness references are characterized by the Nash bargaining solution. The objective of this paper is to explore the impact of fairness concerns in the alternating-offer bargaining game. Alternating-offer bargaining with fairness concerns is developed. We construct a subgame perfect equilibrium and show its uniqueness. Then, it is shown that players’ payoffs in the subgame perfect equilibrium are positively related to their own fairness concern coefficient and bargaining power and negatively to the opponents’ fairness concern coefficient. Moreover, it is shown that the limited equilibrium partition depends on the ratio of discount rates of the two players when the time lapse between two offers goes to zero. Finally, the proposed model is applied to the bilateral monopoly market of professional basketball players, and some properties of equilibrium price are shown. Our result provides the implication that players should carefully weigh their own fairness concerns, bargaining power and fairness concerns of their opponents, and then make proposals, rather than simply follow the suggestion that the proposal at the current stage is higher than that at the past stages. MDPI 2023-02-01 /pmc/articles/PMC9951905/ /pubmed/36829353 http://dx.doi.org/10.3390/bs13020124 Text en © 2023 by the authors. https://creativecommons.org/licenses/by/4.0/Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https://creativecommons.org/licenses/by/4.0/).
spellingShingle Article
Feng, Zhongwei
Li, Fangning
Tan, Chunqiao
Alternating-Offers Bargaining with Nash Bargaining Fairness Concerns
title Alternating-Offers Bargaining with Nash Bargaining Fairness Concerns
title_full Alternating-Offers Bargaining with Nash Bargaining Fairness Concerns
title_fullStr Alternating-Offers Bargaining with Nash Bargaining Fairness Concerns
title_full_unstemmed Alternating-Offers Bargaining with Nash Bargaining Fairness Concerns
title_short Alternating-Offers Bargaining with Nash Bargaining Fairness Concerns
title_sort alternating-offers bargaining with nash bargaining fairness concerns
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9951905/
https://www.ncbi.nlm.nih.gov/pubmed/36829353
http://dx.doi.org/10.3390/bs13020124
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