TF{E Ec0hrüh,f{cs üF

tsARGAIININC

Edired by

Ken Binmore
and Partha tr)asgupta

Basil Biacki¡,e11
 Cc.pyriglit t' Ken llinmore an¡.l Partha t)*sgupta l9g7

First pubiished l!87

Contents
First published in papertrack l9g9

Reprinted 1990

,0, ..*,"11'i,u,::t:|,* 3'1- r iF. rr*

B¡rsil Blackwell 1nc.

Cambridge Center
.1 Preface
Cambridge, Massachuseits 02 142, USA Acknr-rwledgements
All rights reserved. Excepr for the quotation of sht-irt passages for the purp.ses r:f i Nash Sargaining Theory: An Introductic¡n
critlcism and revier.r'. no ¡'nrt of thrs pubrication may be re¡rro<luced, sti¡ied K. Birmr¡re and P. DasgupÍa
in a
retrieval s\istem, or transmrtted. in anv form or by an,¡ means, electronic.
mechanical. photocilpying. recorcring r:r otherwise" ,"vithout the prior permission
of
2 l{ash Bargaining Theory I 2't
the publisher. K" Binmore

Except in the united sm{er,:riAmerica" this book is sold subject to

I Ferfer":t Eqrrilibrium in a Bargainin¡¿ Model
the condirion that
it shall not, b1: wa' of trade or otherwise, be lent. re-soi¡j. l¡irecl cx¡t. or otheruisc A. Rt¿binstein
circulated with.ut the pubiisher's prior consent in any iirrm rf binding or
than that in which
cover other 4 H¡rch tsargaining Theory ll 6t
it is puhiisheri ancl without a similar cor'cition including rhil Í;. frinmt¡re
conciition being irnposed on th* sub-requent purchaser.
5 Ferrle'ct lrciuilibria in ilargaining Mod*i:; 7"7
British Librtsrt Catalogutng in pub[itotion Dat¡t k" llfumore
A CIP catalopue record for this bo¡rk is available 6 irivniuntary Unenr¡rl*vme!.rt as a Fr:¡f'ect Fic¿uilibrium in a
fron¡ ihe Brirlsh Lrbrary. Bargaining &Ícdel lüó
A. Shaked $nd J. S'N.¿nt)n
Llbror', of Congress Ctrtctloging in publication Dr¡a
i A. I'heo:-y' of Disagrer:ment in Bargaining I¿I
The F* ononic. ,ri hargrining. lf P ¡)al""'/br¿rl
Brbli,:graphy..: p
Includes ind¿s. I liash tsargaining anil {ucr:rmplei¿.l trnforrnatir:n i55
l. Game theorr. J. Negoriation--Mathematical ii," Bínwore
" modeis.
I. B.inmore, Ken. IL llasgupta, partha.
t) A, Sargaining lvlodel rvith Incomptrete lnfornration aboui Tilrre
Pre l'e re n r:e s 193
l{B 144.82E ¡S8ó 381 8ó 1,716S
ISBN 0--61 t - I'i2-54* i ,4. }i¿¡ür¡rsfe¡fi
lSBl\ 0*dt l-lóBB9-J (pbk.)
l fl Dis{criion of l}rilitie s ¡nci the Bargaining ProbJer¡ 215
J. .tobel

fyp,,set in l0 on llpt Press Rolnan by Unicus Graphics l_f.),

i t hlash Bargaining Theorl, Itrl 239
Horslianr. West Sussex
I{. h,¡t'n¿rc
Ilrinred in Great Britain by TJ press Ltd. paclstorv
lnder 25'l
 Preface

ihc suntory-Tovota lnternational centre fo¡ Econcniic.q and }lei¡rerJ Disci-

piines (lcERD) was establisherl at the j-cnclon schr:oi of Econi;¡nics rn 1976.
one of its earliest irritiatives v¿as the Economic Theory workshop x'híci. w'as
set up as a forum fcr the interchange of ideas in economic rheorl anti pro-
lided with funds iiom the Suntory-Toyota Fou¡rdation to iinani:e i¡ter-
r-l¿tir:nal visiis and a discusslon paper series. Since tirat time, ihe Fco¡rt;r.¡ri..:
1'heor-,- workshcp iias entertained nrany visitors, w,ilnessed rnuch lieaterj
r1':b¡¡+ :nd ¡;rociuci:d iarge nurnbers of itriscussign pepers. A centr¡i theil,-,
llr r:rriiir ct tirrs rvo¡k h¿rs been the theory of games ilnd its appiiiations in
r'cr;riür-1ic;. [n t]iis and the companion voh:me Ect¡r¡r¡vnic Organízations as
{.;di¡¡í'.r ri,e ¡:,{Trr ¡ seiection of papers written b}, r:elnhers ci tiir *'r.rii;lho¡rs
efiil r'ui visitois ori tiris illenie. Fcrr each volunie, l"¡r: liave rvrriteit I lcngthl.
b,-rl s hope tise{'ul. ilitri¡duction v¡hich is inleneied tr e :iriain th* siSir-iifir:tirr:e
"',
ol iire papers chosen ancl their place in tlic gelcrai deli""lc¡irneli cr'iir¿
sui:;1r'it.
l,tre sirt¡u1d iike to express our gratitude to Sunt*r.¡'-riiel'-T*yilla 1i,i ihcir
in suppcri.ing this trulf international pri:ject ¿irt'l to th¿ s+.aii¿t tü'iRIi
"ii;Íon
lor their essistance an<i guidance in running !.he worksh,o¡r. o\il rr:i.:ilies lrr
this and the c+¡npank¡n u¡olun.¡e v¡ill be rlo¡r*teri t,¡ lt_ll-Rll.

Krn B:n¡llore F.)a¡lh;r L1¡sguptli

l 1¡¡r r'¿'rll¡.r' o l' Nfi r:hi gut S¡ i¡,/rn'-r {,1,1¡',,',q*, {.'* iirrili,/4r
"
 1

N ash Bargaini*g'Fheoly:
An Intreiduction
K. Binntore and P Dasgwpta

i BACI{GROUNI)
i
l¡ spite oi'early hopes, it is oniy in recent years lhat the von l'ietl¡lann anrl
Vlr)rgersiilrn iitt¡or!' ol garnes has begun to be gerrr.linely fnriLl'ui in economic
x :rn:r1r,-sis. Lli r*trrlspect, it s*ettrs clear that lhe delay rvas due cr':iy in iiarl 1o
¡he inco:rri:lriilness of the theory'. since nri.¡ch of what is nor¡,, L'*ing used iras
be::l a.;ei]¡b1e in essence iic¡nr ihe eariy 1950s. A larEer stuirrbling biock lias
Lrecn tii.t ¡r:.r:ble¡r of cletermining under what circuinst:lnces tiie avaiiable
throrf is {ur is not) applicabie.
¡larne'llrer:rreti": anai,vsis, one is fai:i'd rvith tr'¿o
"tVhcn seeliing to err.lploy a
iunilanlcrt tlI questions.

a \\'ir¡: is the appropnate ga'ltrr'?

b il¡rv si¡c¡¡-rid it be analvsed'l
It r,,",iil t.¡pi;aliV b¡¡ impractical lo inccirporate intr¡ lile ll:rtil:ll ¡llr.r,';11 all
ilspects oi the pr-rlential interacti<:ri between tire aiií'x15. lt is thsreti.'¡e tleces-
!-r¡¡)¡ tr-)decide u,l"iich of these aspects slroul,l be fr:irrtriitiy rnodeiied and rvhich
si-ri:uld r.re tak*¡l ilccoi.lllt of inltrrmalii,. tr\th*re and hotv tlils iirie is diart tl v¿ill
b': l-ri¡lh1.v sr3nilicant tu ti':e quesii'¡:r of rvhat t1'pt: cf analy'sis is appiti¡'r1¿¡"'
ii rli. or alraost ali- rrf the esse¡itiaj strategic stru,i:tlir'* ir aclei¡uate1-v.-for¡rial-
i::eil. theri the c.rñüeptlt*i prl:bierr:s invoi,"'cd in cleieritrining vhat constitLtles
l stliutiu¡r to the Bamc rniil' weil be easy. tsut this will ieiiJ'¡nl also be trttt: trf'
iirc te.:hn1catr probierns r,vhi;h arise in calculating tirc:;r:intion. It seenrs doutrt-
irrl. iur rr-{a¡rple. that it ,r iil e',,er be possible actuali'r' io cotllpüte the soliltiot'ts
1)i -qu,;h gail¡('s as Chess o¡'Go'(allh.:rugh Pcksr and 1lr; reiatil'*s are reasotlebiy
i.r¡:*n;¡bie ti,. anrly,sis). On rhc othci hand, if littk¡ ol t-trre straiegíc strurlirií- il
form*Lzlil. iire¡r ihe tr:lhnical proL:lems are likely to be'iligirt crnce a solution
concep! lias br:en clir:sen. tr¡rder th* heading of a "roiution troncepf it is
ltil'¡ltion io urcluije a t'er".vide variety ol icieag. \L.re shali tr$f lll* telm fc
ignil-V a tiinctir¡n rvhich rnaps fron: the given formal structule al liic gaue
!i sr.¡irs!'i-c i,J¡, s'"¡neti¡ti.t$" sers ol sgfusets'] ol ¡rorisibie oulcoffes' Tirc less
 N a sh lte rga i n iu g the tt.t' : a ¡ t in Ín.t ds ¿ c t it¡ tt
. íhetsn': an inrrttdur:iit¡¡t
f¡aqryaitlur-*
vcry care luily. In i;r as bar¡,ail;lng tltror.r' is ctlncer¡lcd" we shall obseñ"e
se¡
gaille, the less ttiltplc;i
the 1¡rxral descriprron i¡'l ir
^iostrr ,st¡li:lic|r
thai rlle ap¡rropriate eÜnc*pt d*pends ver-Y strongiy't)n {he in{'or¡na-
st::r¡ct,.¡rt- iueorporatr.i,i ir¡ lnattrern¡iical
the less likr'1¡'lt tirat anr''
is
tio¡i¡.1 ailii institutionai !:lropeftieri iif tlte negotiation arratlgements. These.
sur:h iunctions can i-re:""1-ut'*'*ft"t' trquilibrium ideas'
,Jiilicitities *,",.ou"tt'*j'*iif ut"n out to b'e intra':tabte' úi cii,,lrsf. wiil sel¡Jom be der"iuci.blr fro¡n what wouid usually'oe rcg,ardeil
as aii aclequate 'econo¡Iic'dcscrtption cli a problen¡. ,A. choice ol solutrr¡n
su;lrasthosediscilss*¿intr.,.cotnpairiotivo]t¡lnr'I:'t,¡.lllotttitürganirar!tlt.tstls
i.onceFt llierelorc inlpli;iily g.sfie ratfls as$urilptions about the 'non-economic'
Gantes.tnakeno*.'*u"lt"thefor¡llelclescr!piionoitlre¡Iameincludesa
to lhg: play*t:'
speciflcatrun of the strategic cpportr-lniries open characieristics ct the situatioll tl'le ¡rir¡del is intendecl to descrlbe. lt !s nec'lssary,
detaileil equiiíiiriutit
r:orresponding
such a specificalir-rn tt ;;tt;;;;;ii*"¿ -1i1"tn- f)n the t'rther irand'
ettlteVervleast'|cbeconsciclusoftlref.acttlratsuclrinrplicitagsu!11'l]tioils
aüal,,'ses are therefore accórr1in-t1y
si:lciom-straightlorward'
ea¡'? rrr
are bcir,g uraile anii tr] havf sr:me feeling for ilieir naturg. \l¡hat is certainll'
solution úoncepts ;;;'";;;;l'sr th'e 'st'upi*v value' are relativel-v
likt ilO{ rile case is that the t'hoice ol sr:lution conüept is sil':ipll " i]í eveil largt"'iy'.
deal*.itlrbecausethr.irdelinitionrequir*sr;irrirparativei;vlittlefblnalsiruct*r* e úaitíjr ol"tnste.2 If ;in inapproilriate solufi*n üoncepl i:; graltrri oft1o a
ntciiel. orre has expe0t that the results wiil be groteseliiell' distor:tcd' Tlie
t*
'" purpose of the Nash prograln i,r to minimize the risk cl gener;ting such
il,:t;:Jrlll*;i'11,,, cird or r:ie spL.,r,¡,1r
l:,lljl,,T i;:;::l"l;Jll:'1,','
'right' ::concept ior the prchlc;tr "''
nrafl!' availabttt 'o't''"i*n t"io'ptu"
iiu""' is the t]rat authorl
iiistortions"
cne and ir iinot sur¡rrising
in hanrJ..[]ris question n r"iiin*rlt their ailii*'3rs'
;;;; ttft*tv u'g'*o -lustifications for
shoutrtl be reluctant
'" 2 -lllll l,lASFl PR0CRAI\1Í
to risk usins,earll.fY^Y"',]:,tl,t-l;i:::::1i':H
But to fudge tire questlorl is n""'irij<l at w111 ti'' suit oxe"s ¡

:l'"1;,j;ti,;'::,j,::',|,X";";.;j;;*'rT' !n ihe ntrr]r"uctioi'l tll tlie companiln vi:lurne' r've intio''iu;e': the idea oi a

ci)1"1''.illii:ilL.": rr* 1i,-,d1:,:t"o:j:]l:il"'l:,,:::';,;,"r:|j,;::il

computational cr',r";"i':i"i; 'rilelq úi*: resulis of air i
1r,r¡irai game ¡¡-1d cc-rr.n¡-nented u;rcrr th,: anaiysls of such ga;rrs irl lhe absence
:* ,;.,..:;;r;;, t:o
*ttr.it ir*qu*1liil"' üciuÍ ili a giitnc't1l'lir¡e1ic F:or exarnpie" ir-i i"''i
1)" r;.¡ i¡ i,Jiltter:i|ve ini'ilstrucl.r-l¡e. trrl voiUme, i-ic,r.r'i:vcr, ¡r"¡r i¡rlerest centre!
iIis
r1u:"i rllrg'i-'l ;ür'tt"lterÚittitive'
anail'Sis ale suipliltng' **L ",finie¡.i. prr,,:is,:i--v or-r lhgs* sit",rations i¡ lthich ;i cooperattve iilfriisirutltur$
is ¡:res*rt|'
p-t"t jt r,o'1ri.1a1,t'rr lhe cpenrng *tú witir pla-ver *ir';';-¡'s
persctr. pot-limit' *'uiit' r1€utr ber "f lie rle cessart' r: onsi.drratitlns are th*re íirre vc r!' iiiiTerent'
{-)n rher t.jr-or ,oun,1 *,rt-, 3
ten"irjgrj 'busti {or u,'rrri..'),
tü úe1 [,irstiy, we shi¡ulc1 clerii-r,what 1,ví] ín*Í!n by a'l:ttopera"iive infi:'stt'uct¡"lre''
lpaili-rif"wosancit':i.-etin.:i':.1!bitr.,:t¡;..sert¡atir.,:ii.rl.itllair:rvstrai¡'"}rtftusir
therel'r-'ri; tl,¡t flfccÍisalii¡i
a r*)'able su¡rp,rr tlisi li is l.i:;|tnizeil tllat ii ffrt¡i¡ I,iiu¡tíon lras gai*e-iike cltaracter'
¡eirse is
icr:rlsi ig75). Lrliutrr,*-ri .1..'r,rnon, isti,ts anr'l an attempi !s maije ¡) gr¡ristiiici ¡ {ilrrrral lnctlei {'i rvhli:h ca¡riures
gu ide iii*se iir;;a.clerislir:s. í:,:i ille ¡i thi: turretit drsculsioll i" does not
iliir:ros{:1i
ii,oo* ,*t,uru5 ¿¡q'|]ot intettried to lhtt :it:jj; :t::'i;:1Ti:::i;
sr¡ggest
or"inruirl::.'ll:::ll:.t:TJ,;l:::ff:; ir:iiltci Eri,,;jilV r¡¡li¡tlt.:; {i e.'l}ilbits aij of tlre pruperties reüuireci ol a ibrni¡l
,r,,,:,:,:;;::ffiH,;';";;;;'';;;;"e*r L'.liir(:, i:.!-';iiii, svi:1.! j1 ii- dii', lr k:rcr';i';dg,e ci"tNre fon:ral slru*fure
l)i'['
iiil':,i,:'i"J.T'';;;il';'.?, " ;;J¿' i" o* iratneti o:::::,:li:-: T,::::":jj-:'.,i io tire gane' in genernl' it vi11
;: ;: :; :';: ;:':r -.,^.."-,-.ri.rñ* ;trnt¡l ílf,ir;lií'!1ll l'.oui,i stiil iloi. u:i,i-iali') i,re adequate anni,vse

j;;;:';; lo"'*-o u'.'j.":to q"ek ioi t'":J;11,;:';i: a;tivity

:::11' :1, 1,1:i',j;:1,l;. whic!l
"
:-'l:' '¡r't*'criilÉ :¡errii ¡iso b* 1t3if!:jary to li;:,.:",¡,'sr¡inetliiLrg.{i.
aboui the tt¡t.l'annalizetl:r
;:;ll,t"1,'il::i "v,:'s ltr-1, pr,:cecl* ttie ¡it'r' rl thc Aatile . :s silcli ulfr.rr::iaiizr"il C:t¡-;:r1a.l' lillivilr':
tt'"+;]l ro;r,r" t:1"'1.]':t-ij:f"::::1 "
,.' th¿rt I,l,* i;al,e rt minil *.'irstl u:,i:lg tl-ie le fnl "ciJOi)*!¡lír'e iní'r;lstr-]jcture"" tJr'otc
in:rt'lu-iitr:r ro 'tre cr)r*prri.r! llil;i;llttr:i il'ith r¿t¡¡trrs/s whieh ¡'s¡-¿ lit* 1'ot)ti:; Lll'!ilttllltitilr il t1:e rrttro-
1!rr: iiler ¡l a biash equili'''' 'rn
'

(iwttts"was irlsis{ent 'rf i]r.ir-rt i(l n iar i11e conip:1ni': ir. v':iline.)
"t';l;--;;1'l;f'¿'1¡¡
Llutthi:;idearronlycnctr,ilev*raiinrpor;ientcor;iri''*ul!i;'lising¡J;i:'.'"..ashl
tit**i f"tlt-ps ;rri ídc'a rri ':;-'i.lxiil wlt*rr p0sii'nle. ir,¡- e:{.4fip1{. l:riay¡¡,, L:f i.i ¡t:ltt'lt lviil r.l'*ulll!' "t'isii ttl
t{1 sall}*
c1-Lrri*¡l the shor.t tirnr-'
lle ti*vr¡te*l :...:i¡tdir:A;e tireir Strat*uy Ci-tr-.ic.e¡.a If ¡r...i1]i: Ol,i.ti:¡t 3i11 relUClitill lo t{-li]iit'rAtil
iltie¿i1*:ileri. li s.r, horv Lrig shi-rulil tii¡':
'*bii:'li it is pix-l';:'; itr'i n,:ri:,i¡::; f-it.;-l' .,lr¡uld be bribeii oi
inrpotlancelscn.l,¡¡,*.:ln*.hat1'*.,no,,.b*cc,iilc!.ilt]r,"¡11..'qti¡¡,Jd..,'.r:¡l.j
"[']ris provides *''""ttnt*'f tr¿ll':rvor'ii witirin
3,ra;;r'.
evaluaiegener',rlu""n''p"on'about.optrn-i*ft'*tt'"i'tt''ina'¡nlfi;'"riiLlli il .X.i. lit¡ i,-\¡?!-tl)i¿. t: sii*¡rc:i'i*ri e.rp!:i'.-'ii1.,,1.1'l::lritr:t.:.i;1.* liís ot!--e¡$¡sa irt:!1Itt{ti]{
o tlt"tt't of soluii:'r' i:',.n'1
1i¡r'rdamc*:*i P,.lili:-:: tit't
riiscrpirneCr n1¿iIner' The ir¡lit ri'i7i).
I l\'ilelc ¡]1¡ ¡r¡r¡rorii.rrrii:c:l lcr rle"¡llay;]f:ilii.\'('!irsn iü thc p[¿]e¡s ure sulficilntly
ceptforag¿llll''the(lreticall-vbaseri*cono¡"it'ntti*iiiterlslober';]lrl':'lrerlj 1 : j;i¡ ;i r'an l::¡:pi';; th:i: ül: ;:;i:::cise ,ritura ol '.1i* fi¡r¡¡r¿/ st:ll:':gies
1i)¡ L; t--'cirilrif c ;:1m{}s1
ii¡cicrant l-re5!¡ip1.i*n1ir,: iitl ir-)!nlal st¡ategie:; ale tht'tt tlpicallv t¡r:litte¿i
ll,,ll-1.,,";;;.'iii'.:ilü:'::':.'iiJ"l'".lT-;L"'::":$' ,l As in ih¿ lrii.l! r;i ¡:i¡¡-¡,:i;jc,.J *quilíbria {!*r Jll!'eIlü!l 198"1 l'c)¡ a lopical e.a(}lint}
,i,Jx;;:;:'il;';lT.'';l'':;; t'"t w*itt"u¡ l9?5' p' 70)' I
l.,ossibic'd!ililor1lir
ou"trnt"'i
 theo4': &n ifrlrcld!"$:ti{}f, l{as;k hargaining thettr-v; an introductiotr
.\¡as& bcrgcerr ing

irrihr's Lri:'l \1'!rer threats will be ellectivril Sui:h pre-pla¡¡ aciivit-v is nÜi always
8r{bre strategies are L:hJ$en i'a rormar ganre piayeci r;ooperativ*iy. !t !s
pla-ved by two con- sui]!'osed tilat ¡:rla.yers m0y commufiicate cerstiessly and without rijs:¡lcti.}¡r
¡ieriiriiled. ljor example, bribeLy in tl.r* speeies $[^ganie or.i tilut thel'luay eiiter intc'r aily agreenients whatsocver that they ühoose.
irr{,,,.,r, srrblnitrLfig tendsfs t() a public ollicial is illegal. Sinlitrarly, ¿nti-trtlst
i¡:rv:r ¿re designed to preve$t tlte fornlatio¡t of certain coaliiions for nrutu¿l i¡l all, it is assumed ti'rat inechanisms eyolrt fr:r eritbrcin¿ sucS
.\,!ost irriportant
is the question crf \\'hether any as'eenrfnt$^ ¡\ side paylllent is to be thoughl *f as a su¡ri of mcneY whicir
ac\,:il1rage P,,rliaps of most vital irnportance
on the players. The i]lterest of tire parlour ;;iay be paid bi' one player to another in or<ier to facilitate ('r liincer) rht:
pÍc-iri;iv asreen.!ents are tsintling
sigiring r:f a pre"play cont'act. In principle, rhe notion of a non-cc¡*perari\¡e
g*n¡"' .Di¡:ior¡ecr", for example. lies i' the judicious breakirig r-rf agreemenis.
gaine covers a wide speclrum ol'possibilities but attention is usually
*l:ile. lii the c'¡mnlercial worltl, contracts are supposedly legally e¡tforceable' arjdressed
to rvliat Flarsanf i c¡rlls'tacit games' and r"ve prefer to call contests" It is to be
l)n ¿ ¡rror* fuüdamental level, it rnay be that th€ pia-vers cannot e ommunicate
witl¡ *ach other at ali (e.g. if one does not knorv lhe other's lvhereabotits) oi
r¡nderstood that, befi¡re the play oi such a gan¡e, the
¡rlayershave no ijpp,.]r-
¡unities. explicit r"rr impiicit, for an1' t,vpe of comnunication at all.
th;:r i]re+tii.:gs of tl-rree or rnore players are impossib!e {e.g. if t}rey coil,mui.ti-
cat* Liv telephonel.s Where self-bintling threats are possible, the or'1er üt
Thi,s cls5sifi,;utri-¡¡t rs tor; crucie to prnvide more than prelirninilr¡,
assistanr*
iir e';aluati'g solution co¡¡cepts. For this reason ce;:tai. coücepts fbr cc,;pera-
uili¡!i tlie plal'rrs can ¡rrake their statements becornes highlV relevant' T'his
niade physic- tiv* games come equipped rvith characterizing'axionl systsms'. chapf*r I.f
bri;tg.s us to ihe gerre rai question of corn¡nitment. conllnitments
ali¡ {iclr example. by investing'in a pia*l} are easijt nrodelled;but what of iiiis voiume, lor example, provides an alte¡native axiorn svst*¡n to thatusualiv
extent lio these binct those: who make thei¡'l luiit¡red in su¡rporl- o!' ¡he Nash bargaining soiution. But siich axiom svsr*r¡¡s
v.:i'c:1 con-i:¡it¡l:egts? To what
the players make ¡lre credible because ol ;".' :r'pic:rlly couchcd in ratjrer abstracr tenns and rllere s*,:m t.¡ be r:,-r u,,:i,s
uar¡ or,e l'L{¡lfioslj tliat cornmitments
to the colnñit|nfnt .¡'ouid irave ern r']rei¡ rt ¡.li whe re the appropriate interpretaiion is not controversial.
rire unpaci tltat a failure keep
'i'h,': Nash proLlraril (outlined
rep¡irerlofis? so. what is the mechanism? {For a. irofe rielarieci iliscussi"rt
lf in a itiv sentences by l"{asir ig5i) prcr.i,"lcr a
relsteii questions on trLlst' see Dasgupta 19'56 ) much r¡o¡e satjsfact*ry franiewr:rk withi* which r,: *nnuid*r ,*.,*,,
c,f r.hese and 'i¡r'
ir'iiticr$. Ili"c ii:rsle vierv rvas that the nrost funilamental tn¿le olgarne is g.hat
Tl-rese erorrsiderxiions are iisted in an attenrpt t'.¡ r"ni,ike it clear
ttr:!t wh3.t
or ffii:lY not l.i3ii' '¿'; herr: c¿11rd :r r'olttesÍ. We l-rave
happtrits 1It a gaine rvi.trtr in general depenti r]c \r'hat n1üy disciissrri tir* lrilre-the omtic anaiy..:is of sr-¡ch
trapper.e¿ befule úe fornrul ganie is plaveel {.or *n ""'hat is anÍi;ipaleduiigiLl
i;r:rer, 1il fhe i:ornpanioir voir.u.r'l*. Brieliy. lhe r¡otion cif a ,,vss& equilibriutzt
¡:l¡i:- pro!ides e i"irrn fbundatli.r:i r.lpon rvirich the tireon'c.rii rrst.. j'hi:;;s
hopr*,,I *,i,:er the ibr¡nai garne is plal'eri). But strlr¿"iclt cirllc!.'pti sirr'plY not tú sat.
sisi ol r:.rappii',gs frcrm a fcrmai game Úi (often rr:ppr'l-i;lüg' 'oiich .'ii 1:ire Itr:[ prohlc:irs ijo not e;i;sr nr:r xjial r*finemcnlj. oi'¡hr hia:h ei;uiiibiium itje:r
sln:ifure uf {r-,¡ r,,r outcomes of C. It ft¡llows thal rl:e ii:-*i|rc t¡i a rolutii-'n air iril¡ r:s¡entlai.6 {Jn tii¿ coutrary. there are rlumerou$ eiil.ficuit¡es to whirir
ire sh¡ii i'ini i.r n,:crssftrv to ieti-ri!). Ilut thesr: diificultici arc ¡.,1 n secoiriii,,
collillrt ntusr necfssariiy entail a whole nlix of inlgilicit assutttpiiolis: abr''tli
íi¿itufe cí;\rnpa¡eil lvith tire crnceptuai prcble'ms ¡esoJu-*J f0r c0ni3:iis
lhe n:ture of iile iooperative infra:;tri¡cture r','ithin ¡¡'ir:r:h tlie p'aru* is tho''rpht hV ll;,;
i,l,::l t-ri'a }rj¡sll *qi-iil.ibriuirr hut,.i,htcl-i remain la:"ge11.,Llriii.r-qoiv*d fo: r';lir,:,1
t{) ri.]iriate- ¡\nc. ro (:arry the same point turther. .h. er:istenre trf :, ba't¡en'
ivpes ofganre.
ol su|'ii soir¡tion aoflcepts necessarily implies tire eristence ol ¿ C/dss¡Íic¿¡riii¡¡
we nol'r' turri !.o qanrer clhei firari contcsts - i.e. gl;;e:i ,¿'liicir ai.e i,r i r,
inirastructures - each ¡iilferent concepi l:;ring aÍ:pr,r¡:iriale f Jr
c,.r,,-,¡,eriiive
'f¿,-1iite rent iiti¡astn¡cture lln,rl,r's¿d on thtl r¿ss:-;r111:;ticit iii.*t sJms tneasurr;,ti r:rr:-¡;iLrl,inle ractier¡
btlr. Jr,.i
"

is alrn*si iiracrt,u.li' ilre ¡:i¿ys¡s is pr',s:ible.j i\j¡¡rb p¡rr¡¡115sd tr: deai ",¿-iiir the
'{
}.,e stanijaril ciassilication. illustrated Lrelow" ol pr*-¡:ri:r.,
¡;rc,l;lerrr
pl'1liiií11/ e
ír.tivi1y irl th¡: i'oiii:'xing vu,¡i¡. it G is a l¡¡r;r;l {alíu.:. it¡lr::ine tlrs vlr¡r._r¡-¡:,
¡rrlssil,rle steps !n lhe
negr_iii:rtions whicjr prei:ed* :.,s i:11.,.a:i ,Ti{}vcs jrr;t i;r¡i:,;,r
'ti;¡otiaiion ganr*'ü * i.*" fr-;fi,'ralize ihe nerii-rriii.i,ir ur.oredure. ¿ !rrlrfl;1,,
,,, \ ii¡r' ilie Ío¡¡nei .ea.nte ,,\' i. ¡ ..,tatemr.nt o1 ltur,. t'-, a,,r,l,r*, tir* neil,.tri¿,tlr:lli
n0n-cooPerat¡ve cooPeral i't e
.i 'ihis ccnsiderátiün iail rnültc¡ eiloilnousll, lr¡;il:--k:: t,LltcIii1r.r)i- isee Bttlit:rirc igF-1.
/r\ ,/"t
/'. \. Rir'ti¡i:sti-.in and \!'olin:;kv jg.¡^"i.::rcj
ljinilo¡t- and l{el;::.r: ]9g5.)
/1",
/'l\
/tt z'

*
ú \l'i: ha'e in ¡lind piobleris ci eqniiitrrirrrn selectic:: rnC tl¡c Liil'jÍ;riiti::; r¡.ii:.i rl,i-
iri rrtr::tsivt',forll1 g¿1l.t1es or i¡l ga¡r-,*l of Ílc¡riipiete ini-c¡:::lti¡:¡n.
? I:i)r sl*lplicily, lre leave asirle lhe r¡uestion ol rtr:-;l;r¡ i:nt,:racrion Lrltliüufll ilri'rr
aon tgsls without side wittl s¡de
*',il bc ;ir¡¡ri situations n.íiure this is r¡erv tiunif.icant.
paYmeñts ilayments $
itecit games,1 .1,i

s
s
$
 n'. t i n fr <; ¡l ti * fir:
,\,*s& lrcryateimg íheo'ry^: sn iñtr'Jdatri*l
i\ u :, h h s rF ai ¡'¡ ít?8: ¡,; i é:# * t t¿

ugd*r all p{}sstbi* e,;eriiuaiiiies ¿ri¿1 i¡ov¡ f:r¡aily to cl¡i¡ose a *rateg-v tcr G
üoriilngeni cn th* er¡¡¡rs* the negotiatio*s lac,k. 'fhe neFotiation gal?ts it'
is
f.llen analysed a5 * i:{,r¡itsst The sshiticn i}f ,,\i as a c$¡]t€st i}:en pr,:vldes a
'c$l'{ttion ¡Joncepi' tur tir* *riglnal ganre G. },iash ¡naintalns iiia! s1l';¡':i$ii'Jn
ü{)noepts forGshouitii:erega.rdedthisiva,v-i.e.astireloiutio:isr-ri¿ssl:*iai*ii
n*gotiatiL, ;r contests.
An cl.rious r:-ojeciion 1* t-h!s ii¡le of aitack iies. af course, i[i the difliculty
ol findin a niodel fcr tiie rreg$iialicii pr*tsúuíe which is botir realistlc and
suf'Ílcienlij'simple it: be afile&abie ta a:reiysis' Ürie response is that diff!-
cultíes |:nnof successfully be cvaded by pret*nding iil*i itrrey do noi exist'
|,{61rysvr.r i.natters Bíü nci so liopeless as thel'rnay seer:! a: firsi sight'
iideilrE eppropriatr: iieg*iiatio;i rnodels, it is neeess*ry' to ii¿cs
, i(its r,.i.iicir have, ür a¡]ilear tc !'ia.ve, I g?ll$in-e strategic releva¡lc* tire
,aiiclrr. f'his certaini;r d¡:es not apply tü ihe bulk sf menc*uv¡e! t:*I!lel{rt
i* ¡eel-liÍ-* ne.4*:"i.:itions. l.j¡rder rhi"q 1e-rter ireading, fbr example, ei:lrn* {kii:ri- ,
airuse, tiie incs*s:i::¿nl of bcrefit¡:r¡ at|d oiher m*re sr¿biie ai:-ernpls
iire opponent at e pnyehalogicatr di:aivantage. Thesil i-:.tilis rl.'.)ül.i t'f Itaií}iy
'¡e of thc gieá¡e:r,i iniilüitaflee ili. a behni.'i*iliai a¡41:tsi$ hr:t lhe1" !i:vü :rcr
plaee ii-t ,r ga;n,r-1h*or*tie analysis. i. ¡ati*¡1*l player'.viil sifii.'ly igti*r* such
ir: i*levanlie:.ñ
It is as r¡ell t+ rnlirr¿e upon ti:is pcint since it is i¡:i issue r:it wirlth lhe
lite¡at;-¡re has a te$de*c:,'lc f't¡d8'i' {See ail* St*tion 'l *i tile inirod"*cli¡.;n
t* ¡i!¡r üoí$p¿nlcn voit:¡::e') C*irsider, for exat:pir:, a twc-Fer$on cccp*rativ*
garue.V+?}}.üeu¡xennafids{cigsnstein{i94.*}*riginalll'st}.g€lested.thatt}.ie
is,¡lutic¡r-, cf sr-¡,:h r gam* be ir1*::tiiieri wirh a rvlii:ie ci¡;'lti¡iuum ol possibie
outc$it.!es raii**i ri:i¡:':-!egc!!ati,-rn tet' ill'cr¡¡*' r:l'the garu*. T* ide*tiíi:
particiilai üurdofne *i¡¡¡i¡i i-hc {{:r*. iix€ir sugsfsied, is *n **:*rpiise *r:isii:le
,ropr* oi tii* gar:.i* :hec;i$t *n thfi gi*u::'*s that the r"j:i¡t'c''rE1e *ii w-|riei¡
tlr,
tire playrr-t :iilaiX',* agre* ru.:iii d:pe:id o¡r tireir reiative '"irargair:ing 5ri:weri'
'iiris r¡'¡fo¡rnetic¡l wiil i*$iai:r the same ev*¡¡ if ¡:¡:¡e *i' our chess-piav,ir"i
ciri¡r¡:¡an¿r:r; ir r*piai:ed i;y Capablanea provicie,it orrly rhat brc;rh I:ave th¡
sarne pr*1eren.es over ¡he sei of outcomes. A tr*hasii:¡:rai anaivsis rvsuirj be
üuite a. {.¡iiierent ¡ni{tter i¡nd w,ti;id doubtless iake a*cou¡il *l such f actcis
ag 'cil*ss playirrg ílowef' elc. A¡r ethii:ai aaalysis r.voulci similaily requrr*
taking inro eccüiint iiurnei*us issues which ar* irrelcvant ro a galne-ih*oretic
;:nal3'sir. This is n*t io say that a behaviou¡al o¡ ar¡ ethleal anaiysis m$irt
nct he ¡ncre r¡sef*i than a game-theoretie analysis: anly that it is as rvell nct
t* be c+llused ai¡¡uf what sürt of zuralysis is actuaiiy being atternpterJ,.e
Thcse irieas {:¿íry úver to bargaining garnes. {f the ga:ne'tlieoieiic o¡:iin:al
stretegy i*v*j,.'*s playing like Attila the Hun, then this."l.il1 rernaln ti-ue::ü
!r¡ *r:¡r'
fiatirr w.ti* t?:e piaver: might be. It may be true that Si Fra;:i:is olAssisirnight
Ú]i lliÜsc'
f"ind this rtratfgir harC to imple:i:ent but tl'¡is is equciiy t¡rie *i a chimpanzee
i*
atternpting the Sicilia* Defen*e Alternatively, siie may'. cbj*ct that St Frar;cls
wor¡ld not r,",*-¡?i tü behave in this way on ti:t gi*a:irls that ;ire "*nrl does nr-.i
jurlllv ¡"he ;¡-¡':¡";:s'. Bril thi* is an etiricel quesi:,:n ¡a be de*l:',r:iii¡, ii'at il!.
J.';'} Ii"il
i-'y l:ler:a¡ ihe p-.:i .'í-i.,.'rl
1Ve have bea"n *rguir:g tnar lhe itiasli ¡:rc6ran Í,;¡ f.ir¡naiizing iiegotio.ricli
prccedures ii iess lbrrr:iriabtre iken it at fi¡¡t ap¡)ears pravirled that ¡:ne aCher*s
tirmly ¡s a garr!.-:h*or*tie viev*print. N*vereiteiess, !i re¡nai::s tie case ihai.
wh;-:r the negoiiai';rn pi*ceJ.:-:ie h¿s heen firrrr¡aiizeii, r)rle rnilst rxpeú1 t* b*
faced rvilh a :lru.t'"xre whos.e a:iaivsis rnay be t*cir:":!eaily iiiificult.Fcr this
'| 1
.:i re*:i¡l ar¡d oih.r-rs,, Fias,'.i rvas very far frcm t',rgg*sting {het co$perativ..e g:une
r'
.i.iÉ theary -.r:r:';id bc ab*¡r{io:led. To dc so would be iike atientpting to st¡:iiy ti:¿r
i
niox,emeilr sf bilile¡d l.ralls using oaly <¡uantun: th-ecry. f,]n the cor:tie.v, ldash
'Í llic'ughl ,;i csoi:*rati;e and non-ccoperative tliecry as coaiplernei:tar-1' ar:d
:r
',.I
,t
mutu*113r *i*pp*rti:rg, prongs of a pi*eer ettack ilpün the prohlern clnegr,iraied
,,4
s¿ilies. lhis *re.,v ls s,;netimes el¡$sitisd along rvith Fleg+iia* di*!,:c:ilc as i,ein¡;
:.4
il: inpe*eilubly parrdi:x:*al, b:¡t rqe s*s iitíl¿ jusiifi*ati*n i'or such an attii*iie
i. lr

s:r,.'c ;i:c.,Jcr,lt,;i' rie:-ri bif .; :r-:ire sim;le.

,':
;¡d si;ci.r ps.i{¿*}lsgitüI L"actc¡rs eiiide adequatc fi:r¡naii¡atiq:E¡. itiail: hu¡ts¿ii i
¡!"*r stresstd ¡n Se*iir¡¡': l, a rcei.1i*:rraticai rrr+deller i:: ecrnomi+ theua (cr
rnak¿:s ¡eírier.:c* ti] á i:iiniia¡ behavloural noti¡!'t i:f "*arg*ining
skiii' rn I'i1l'
ir* i¡i¡g<:ris ;:r-',';hi"'g cise¡ h*s tc exer,.'ise lrh judgemeni ir. de.:iiiing hcw lnuch of a situa-
i.¡,r av*li¡irir/
Uur ;^.lJ tu!L¡i :'ñrrF!rrs hi:'ns*].f ic the iarer paper iil*53,i iv!:ere .:{
therc
,i:
'¡f'. 1.;,,: 1 r :,jF;csr:l! ín,val;r'r.,'ith.in f':i ;r:ldc!. ¡l:r Cecisii,i¡ r..:ii Cepe'rd ,¡r r¡i¡ar.
fii*t, 'r..;;fÉ¿ ¡ieopit \"¿ii{,i ,si{: suffidcntly *telligen! ar¿tl r¿¿{!or¿a! {t'tt::';!¡:l
sG¡'J}Eri¡;i'g ,i. ,t ss¡:ir'Jt! *f th* s:.tuatic¡: ¿¡n lf particular i¡:fesest to hun ¡¡:rd on iris kn*rvierige
nití ht nn.v qc.test!*n o{ "berE*ixittg c}t¡rry"', e .ir¡:q ¡trft¡¿i; s¿rg$est,s
* *i ¿i:* cil¿ra:i*i ¡.rnd*r study" lrr practice= the r:{te$i ta'.¿,hich !:e is slrc';*:;slul
íii'"e still ín d*¡:;li:¡' tPse otk+r fú!*w'' án ar;atr':gy rna'v i:* cí s':i'lic
,:+l
heip'here.
F*:haps i¡¡ ih* circu:nsta¡¡.:i:s' lh* ,t:9
i:: É aiii ,j*p'¡l"iC *n ilow *ievcri.,v he d¡uv;s ti:* ¡!¡le b*tw*e¡r tJr+ fbr:¡¡a! antl lh*
Ln*glne lrvo ckin;:anze*s playing r:l,ess.
it i ii¡:i:,rin*i sG i1s lc ¡naxini!;¿€ the effe,;tive:rrss f ii;e anelytieai to¡:is ¿l hls
pleycis rr:ight finri ir cifÍlculi t* fi;;;::a3i¡e tj:e rules cf th* game and l"'iii
.r,

princrpaii,v *l:
certainl,v Io tr¡.,* ti-rlt the fliii**rT:e ,uí ih* ga:::e w!1i depend "" i:
I Thr: res.sclt l'lr att$¡npain{ ir ¡¡.::ne-lh*creiie a:raiysis ralh,¿r th*n a behavic;::a.l
¡.sycieoiogrcel facl*rs. But ihes* i*cis *re
i¡rclevani to ¿t galÍc tirec:i-st w\i:' ..:t
..',.
i.
it ¡;*;m:;:p¡¡:r.ir¡le tü Ecl?s ihe si.mpie pr*blenrs lrcf*re seeking tc attaqk
:¡:;:,ij's;r is ihal
*;;t*"s i:'
is"ecneein*d wi¡h wh¿t p''p¡li¡J be i¡e-c: lbr *:e pl*;rers if i;r"rli' th*y ;l !a
ll:
':i.i
.,r,ig iii !* a i',:::n;:J g*.rre as defici*d bl, volr lüeun:e:rn and S{+rgens!e¡:¡, the *nds arr i:,rti:
.rstcüínf ci ú abiilln*¡j and :¡*t r::lth lhe i:É&l arairle i¡ocr tlre rne¿ns in that Éarh t*r¡ni¡al :nod* catl 'be re*,ch*d fy *ni,v ore palh
Ldssr.rir;lng hls "-+¡:t¿li': wat trtli' '¿"itll the i:i¡ S
ii', rh:r.rugh the game iree.
rnafiliei i¡¡ ¿hich it was achieved' $
:r:,.Í
r:' ii
11H
5 ;\'r:sl; óoig,;ii:;:tg títtor.t littt'túu( ti "t ¡
rVasi: br:,'g*iir i * g ! h c o n' : t] t! itt t h) J Lr ( r ¡() t t
" '¡'t ,
¡,Lri*rtc,¡s ii ih* l¡lini 0xir'r1;rl€ñI1t lrn.l ii i:; ¡iic irie a oi r miriii c:lp¿:¡ir¡*rii
:;
guclsh'r'Íi'
,ji:i:,,:,i;¿| an¿j ihus 1o t¡iininii¡+ ilis depentlence <ln spcil.:1rf tlJ:l at;d
'1.

ti r',h¡cit is ¿i tiic ir$ált,-rf :i¡e ncn-cixrperative siiir r:i ilrr. hitsir prograrn.
i¡l '.,.' i¡i a!'t.3rFaii1,iitg is cr-'nce¡rtcd, ts"c i¡rl¡iledi:ric tssrrt; rr!:e * 'l'ire t:Llr¡irrs* ili ccnsi,i.ie t,;ri treg()tlaii,;:r r r)ril*sis in
to be irrlrrlec!iately inlcresii:d in the ri*tail¡ t which the ilrtaili ill
rii-iit* n-;odeller is urilihel,r,
per \Lrlrat he wiii care aboltt 1s hr.r-t''' ih* r¿:s¡¿J¡ "i ihe
9.
the r*got!aiio:.i procedure !lír spelied oLrt *xpliciily' and wititirui cr::¡.,r.'r,
rt)I ille fl.gOli;iioris se. ?

is ¡i¡r,- besauic ii i"c tiloughi that sii,;:ir tr)odels r.,ili trir¡rlacr-'tire use cÍ aj.r¡i:'r-l-
5i

tr: .t,.:ilaíions i: likeiv Ii) lilaiige ')'i r*-ir'l'3nt 0C'lnilll-rlc !iülajr"

lr'lS ¡tt¿:¡' lll ;
¡ ll','e :ulutiorr concepts. 'l"h* puipose is to lesf cooperatil'e soir.iiíon coircri,'r.s.t'r
ijj. iv case5 i:: ,.r'iii i..,+ slrkúrg Ltt\\:/ qatt!itCl¡i's rather titan <luantiralivc '(j:i- ¡;

*i, -:ions ,l)n illis isii¡e.

i
fi
li a ceitain cc!¡rcpt ls ciarmed iü üppiy in the presencr oia particuiar i¡pe ol
¡a:
rlegaiiation s{t-rip. íiirr náy ask iiie claiment fr.l¡ his reasoiis. Ty'picaiii. the
li The ;ncdeller is unlikely tr: ir¡v* irarrl informatio* airci¡i a r'''ltüie i
il
sl¡ .:!fuix rif issues reievant t,¡ tlie tletailtrd coniti¡t of the negoti¡tilns.
it i: i:: reiisoírs offereEi iviil cc*siilute a dr:fenc¿ not onl;r'for tlie negoiiaiioil sei-up
tlire*tcd .{
criginally conte:¡'lpiateil bL:t ¡iisi¡ tbr srthcr ¡elatetl proceduies. Tire a:,ruiilcnt
rer ,i:rkabie ii¡--rv litrle cf iile c;npiilcal ,r,cik on ll-rarket iniiiiutirrns
is
g
:li isiics'¡hi;h a tlfie t!reciisi ';'iouiil regtrrl as s!gnilicerrt' -¡n lircn be ex¿i-liii:e i l¡i' l¡mlel9,ing, the sinlpiest oÍ' tirr:se procedu:'es arid
!,
{ire iier¡iis ol f rn;iil,sirrg ii:* resLriting cúnlest nür'co,rpríaiiv*11'. Si:ch e nrethLl{i ali{-}14s the
iii.;.rl:. iit+i:e ccnsidciitions i¡riiiilie in iavotr cf col.rsigi:inl
;:riirr-:sljic ol ¡iil'r, iheürie5 iof wlrieh Íh*¡e seems ilo lack) and the opporlunrli
F.:

liii: n.gLlriariclt pio,;rss i¡¡ f.ite ;rea io be c33lt witli !nf.rrmaii'y bv inti:11'ier: i¡
:lt
¡c ¡r:iirir: in,-r';lnplete ti:ccries.la The hallmarh l,r;d ilte es-re¡ice of tlt': i{usl¡
s:,,:iüi;iian cni ri:.i.r¡ns:1 gue;:!r,r.;ii-. L-r pr*crie al t*n¡s. this nieans ciii-''.rsi¡'¿ ü
+
Í.tralTt' t!1 i:; ti:ertfore íne irn¡ter*li.'t)e to fest sbsírdcí or itijonis! r<'t¡sat¡¡¡i!
lr: ap¡;rr:pri:1¡ '1',¡'-¡¡ereti';e ;oi.uiion cünce !rI' uoder \vhich heading carr b* };
r! ,,,,'i:h, ti;tt;iii íur :;¡:';t!fic negoÍlr¿tiúy¡ ¡t'¿od"':Ís. ,{nd an irrpcr'1ani clul', ir
ii',;iuied sr.tcir qr:tii-rÍs ts lx,ialrasian '-'c¡uilibrieni" ili'-' Sira¡rle.v vaiue" ihs
L:¡)i'e f,
¡¡ rl-lriie$ theriri:'is is t,¡ pri:".'l¡ls a batterl, of su!table lnodels lrr facliitate suqii
Lri 3iicl 1"],:ilil3rr¡r s¡d fi!6rgelstern soiution sci. Wiiililr iire liesli prog¡ii¡l-!. isl:rg.
ci tlies;, a;'rC $tilci co,.,.:.re!'etive s,:lUtit¡¡1 crJilcaills aie seert a' ail atti'illpi
$ i
e;cir
As an exanlpie, consirier the r;se tiraf De h{enil (1971} and othe¡s have
to rjescribe tllr {iú'riro1"!ie'¡f a ¡ron-cooperaili"i ne¡l'iialion g'tt'te *'ilitrtttf
s
course' a coope rative rÉ ¡:raiieol tire liash bargaining soluiic;n ir, discussing unioii po\1'or and i*ialed
;i:..r:;ai;;it,{ !lic negr:tir;tit)r^t procer}urt:. To be useiui- +f :!
appliiable) to
g issues. Froln tlir p¡,i¡¡ *i,.'i¡w i:i the l.iasii Fiügrü*i, suüh !roil,, il:"rs¡r*r:1
:-:i.¡iitirr.i¡i irroileilufú rlu¡¡ br'ap¡llieable {cr thr;ir5ht to L"e e
$ ir;lai¡se it Í,J?:; i¡r1 s¿ri¡,-,i;¡ir.,¡CCress the questr*n oiirit;,r, the iiish barta,:rr-lp
ialii' v¿id.; cirsl ci leg+iiaticn proct:dules. in s+tllt: ia:es. sucii aÍ; iil* sh3¡]if v ::
q
r¡iiitiori ir tq¡ i:r' us*C ¡¡iher:iran sc¡ne cther c¡oüeraiive iioiic;-t. Lik* rearj,..
.;,rl',re, tiii: ColtCapi is i:*st see n aS an 'aver:gr' of lo;li¿i i:; to'bl expected o"'er $
as tht c{ifr of a
.x
;:,;::.'rc liill:,. :i,r---ii¡.',t'-.:t i{-}:-jr-rfi}'i5 giff:uiC nOt iif i:oilS.i11 vriti:Úi,ii ilrst t¡',.ii-it I,itcnl
sUCh 3 Class cl negotiaiion prücedurils. Iti otli.'r cases. lucir
.¡

cortccpt does nert suppi3';r Ii; ;ii'tr.;i sl¡i:- A:t.,i ire¡;:eri:. r:i:ent rvo:!:. based on an inrportall pap*r i;r'
",,lii l{eu:can:¡ ::nrl Mo¡Ée,nri*ril Soluticn set, tlte :i:'l'i::::lcin i,:hriFt*r j ,,; j-lig alrirciri r'.;lurne.!, indicates th¿il sr-¡,;h i.x-;¡:L,r rr
liC.¡"rniltaci ir: illl i¡l'tili'¡h !
i:riiq'.;e +.,j,..;i):lii and *-,¡r. is ire* lo att¡lbui* il-rii ;
intcrlcitLl i$ he *¡ririi;able' i: , ii;s"i!i*,1. ihr iirifl;':lt_r' corii*iit$ '*uiside option-c'- b;,.' ¡i¿¡ rvt ntrarl r.1
*i iie eiass *i'ilrJcedrj:.i:,.; ',r,hiti'i iile cDnCr:Ft is I
,i¡e iriliiii, ir-'v¡:i: whieh harg':intrr i¿ri auhitve i:¡":le*.'.'irlg the b¿¡x:.rti',i'
Tllese lssl re¡::aikl-r:n¿!';-i¡ *:ital ti:;t rlrt N¿sh "'it'¡poinl i-" vrliiabl*
as ¡¿ .;:

s :,rhli: ¡l¡lrj ai.-:ir¡d¡ning tfte n*gotialio¡rs. 'l¡aditi,]nal rvi:Ccin takes ibr gralited.
pir!ic;.toph:;a1lriopi:rtiiLlx'illgahcuti-'ilcP*r¿ltivilit-'i*iicfii{incepir'But¡ilrr l.ll
*,
!. ri;:ii lilllr shr;'Liiil bc ¡ica1i witli Lrf icie:riifying ih+ "-ctaius qlio' point \1 r:i'
rtal i,¡iis: (.;i'ili* t{arh or,,g'*rn iies ill tile poirrt to i;;:':r:i1* ne'}il. ihe fi ,l; "'.,,¡:1:rric cpilon'pcirii. Ho'-','ever. rii'l exarni¡i*tio¡i cf the apiiropiiir-
pi;1,s1r;*1 sc;ences, exp*rimeili prr-r.riies r f inai couri ;o
rviiicil criti''s r)i '\ J:'
gU*ssw¿:rk '-:an rpt:eai' ln t-he so¡''i;lisCitnccs" ct-tiiciu:;i:
ts
f .:t:l:¡il¡l of iiiil:ii¡isieirl r vpr\ 1,,,¡y'¡i. ¡9¡1,¡¡1,rpi-,rati','e bai6ainirri¡ ;ir_rii. j
ciSe: in s,-:tui-lierl.,rn ar.r.ei
.ir,.,,:: tl.i:n. ,¡'lriit: 'ri:i: iriertilicati¡;r -r;.,-v liave r**rii r¡: sorrr* :i:ecial ci:-i"i;ii
*
a¡ips;is rc trpei.iri.:errtai ¡'iidetcr: ate ssliüu: rossii;i* pa:il¡' bec:'¡:': "'' *
{
'rj.{ü¡"!ie it is leloni fe¡sibie i* impose tire ¡¡*'-rr'l' ñ i,aili.'rs. it ¡l ¡¿ci i.ii*: rigirt !1'ai,' t* pr,ieerl in ge;rtrel,rs Tire pairri ts lh;,1
n,t,.rrirli;¡'s !-,awit ¿nd IJartii se
É
!t eil ihe mcre in-rpr-ri-taliÍ jn tiie s*cial scirler' t"'
-qa¡y ccntrcls. l'l-iis makes :+l l.l i'i;i-r ,'':i;rt is r¡ailt ¡i;:re;rer !,:r:gil: i¡ i-!rr i;:t:¡ducticr'' io ihe cc;:lta¡icn'.'¡lil¡¡¡i:.
afe íiot
e xercise r¿.:rain1 in rn:iking assuinptions * pá.114üiaii:\i llrr-¡:¡t wiiicii &
É i /l¡S*¡¡!:¿::i*ns cs üc¡fies.
t 'tlitra?¿¡r'
i;f r¡¡li,:i b*i i¡::lii:c!tl'"
statL:rl e,:tlictilv in ihe dls,:rlptlcir 1hr lorrnai ':p¡reai * l-: r-ir. i¡¡l üacilsio¡t, tlr 4g9;tt ¡n the t-c¡r¡ul¡tíoq ,-,{-n(:w a*üFet?iii'/e soiufion conr'epls.
..i il¡' tirc 1',pe oi p¡r.css, iong far:riiiar l¿ ir;aih¡:¡i:;{ir;i¡¡rs. d¿s.:¡ibcd i:¡ l-akat,.-.r"
ou , ,.agri, r,¡i'tir¿ ci,.:ic* ,¡f i¡, stiuttu¡e tt'¡r the fori¡a1
tnr-tt!ei anC wh¡s" -:'¡stl- +:..

r rs,rrt;ol:- t¿t1ti. g. (, ri i ú t k) | s i 1 9 1 6

ii¡¿,.'iln, il a*.v. is bateri on infi'rnlal consiileratlrns" OLie ibrlt.¡ L.ri's'¡ii-lils:lljjrlc

s{ r
¿ .\.
l! 3tr:3i¡:;¡r.r;:i: {igÍJ-i} r-,r íií:ke'l:ir-rd Sr¡1to¡i {198,ii. A ¡r*le u,ideil a.ppii;ablt
matliciri;riicli noc*licr in bi.rth tiir: pir"'r':ic::i:¡ril ¡ir': si';i''ii
É,
ar,ni1¡i;!e t+ a ie:'
t: i'ru'.*cli;a ;¡ tt': in;aie ilic 'llail¡i iluo' at the ¡roint rvhi:ir ***id resu!t if'nobol,,'leil
#, :::,:':;ri:lc 1;,t.: tlc¡l v;a.: lieiprii"jal disrrglci:i|icnt a¡d t¡, ob:ervi: ih¿i'oulsirlc cptions'
ll¡¡irl;a]: cl: rr,i.¡¡] p rr:il ;',{¡s{:1 1l'r; i-¡:¡g:ini¡g outa¿'tle ií anJ *niy if ii assig;i:; ílr-re Cr inors oi tiie i;;lrgrr,t:i
i i Un<i¡¡ clrcluill", cc;¡lrl::i.!rl *:;pl:l'inen1:rl t'¡.¡ntiition¡, labo::-iict;, el i:\: .jtin hís r¡i.:tsic¡: optiorr ulititl, leve!.
thr'1 ti;tnrn rrtii Pleaser, ,,p'
*1
¡¡i

*
fl:
 üry theory: an intraductipn
Nash bargaining theory: un introduction i I

ti j ,tuusfu bargcen
fti-.q1.-^tll?i:
r¡ldit io nal *,r¡c,c:n" rvhicli
is intuitively quite compell.inU on'
i
without tire üiterventto¡t 3.1 Commitrnent
\\'r)uid nLrt ;;;;';;',l chniienged, let aione altererl'
advocated by tlie l{ash program' ln niuch economic tireory it is taken for granted that agents can wrile what-
!)i a lesting J;ne **p*ri*ent
as
tli'er contlacts they choose and that tl¡ese contracts will be totaily binding
on tire players - i.e. that the basic liypothesis for a cooperative garce is satis-
rRc}cESSns flied. Two defences of the hypothesis are usually advanced. The first citr:s
3 Tt{s FOR-\{ALÍZATION OF NEGO"tlATi0}i
the existenr:e of a legal system and tl¡e second refers io the importanr;e of
cruciai
dlfficrril :* n* to identify the inaintakiing a reputation for good faith in so f'ar as future transactions a¡*
At first sight. ir is surprising how 11 very consiclerable
rea"tuies *f a i.,a¡gainin,
pr"J"". o,'e wouid t]únk that tlte concerned. kr ma.n1' cases both conside¡ations will be relevant. Whatervei the

:xi:eri*rrcc ..' :1I have Jf ;;h;8

tt:'l*-l.t:tl oI arlother would bt'more reasons, all the essays in this volume take lor granted that the aim of bargein-
be"tu This apparer' faiiure
of or¡r intu!
iii*lul irr ltii-r respect th;; ;;t?; io the von Neumarur tlnd htoígen$tern ing is tu provide a cofltraüt riescribing the agreed transaction and t\at all
oí agents regard such a signed contract as equívalent to the transaction i¡self.
rive 'crsigllr ;rlakes tire avaiiabllity valuatrle" 'Ihe aitempt to
fit
exten-s;tt"t particuiarly
an Of course. there lvili be situations for u;hirrh this is a barl assurnptiontt as
ii¡rnrulatlon '¡i ftlmework forces a.utention tc¡ be paid to
ilLe curreni disaliay in tire ',v()rld bankiilg gyst,ilin amply demonstrates.ls
ir nego'iiation í)rocess *i"-tfiJ'-
f{*r';ever, the l'r;rpothesis that the fin¡i conlract reacheei ru¡íll be honcu¡ed
ieaturesofthepr<lce'.''",r.n"r'",r'erwisen-rigl-rtbe,lisnrissedasirrelevent.
of modein bnrgaining theor;v has dues nr¡l seern an unreasonable assumption fronr wl-rich to
ilne ¡rl tire more 'is*in;;t- di'coveries begin.
Sr¡t it rlol foiiolv thaf, because it is re¡si'inable fo assume tirat one
doe:i
beenlheidq:ni!ficatiorr"fA"onntt*ir¡esinthebargainingoutcÜm'easceftain
alloweij io [*nd to
.iricti,¡ns, cr, .imperf.ec.lio^u, in the bargaining pror*r, are i;,,pe of contract wiii be hcni;ured, then cr¡y rype *f coi.¡tract v¡ill be hon-
I ¡urerj, In partr.icular, it is eas}, to c¡ve¡esti¡nate wttat car¡ be done via the legal
¿-g¡c.].tlhelrrrit,aunlqlreoutccl.neisolrtainer]ilttnatiy,¿5¿5.[irirheother
a uriieile rerige of
equal to zero a ptio{i' tlien slr.¡ern fur this context. I'Ve sliali iake up rhe i¡rsue {ti fontracts r.v}-iic}r relate
h¿:rr1. it the lrictie¡ns aie set naturai i
rliirrLril!*S anrraÍs ,'ouñi*'
*l'ui "***d ai the tlme ic be an enl'irrriy \ lo ths aciuai tra¡rsacti*r.l again under the heading cf ^infcrrmation'. For iire
therefbre now appears as a po$si'ble roat I ilr()ínent, irov¿ever, we wish to concentí¡te ,Lrn c¡.lliirriitments {unilaterai i;r
r,';isilaiBii.rforw*::d iJ*':i'ution {tleory
.4

p'*Ut** vi'hi¿il lras piague'J bargai*ing irriitilaterai)t ttrlaf the pl*ve"rs may rvish to make abr:ut how ilrey prr.,ci:r
cerrsr íor tir* ia¿i'te'm'i'a*v 4' 5 anc 8'}.
the s"rblect ' {See chapters t,-r ;olidu!:t 'Lhr negotiati¡;ns in the i'riiu¡e. S*iieli¡ng {1?60} has emphas:;r*d
since F-i-igewortir ;;;;;; is now
"-rer-Ihere prucesses'lut'il brrt"li hoir¿ useful it is to ple;,ers i{" the i' r*ii lo¡v,r lheir c¡:porre nt r'.i!h a
is stili much t' üt t*u'nt¿ aboi:t bargaining
urr! t*"o0 "*uiri ;le:tiii¡:e "ial<e it ci¡'leave ii'¡:rcbier:r an',1, ein-rr"iitalteeiusly. hor.r,hr¿rrl ii is in
ro1+r to be asr;rib¡"'il :i
:::*":::l:t:.t:::;li::
'""- . ",
iairil' weiitsrablished'in'i
iairiv weiirsiaDilsneu
*nui tt likel¡' to happen
"*
Lrral
without 3 on
l1¿r7i¡19 v10\ru 1"he
io
prr:i:ricai ¡etr!ri tcr tnai.;r lhe necrsii:r-v cl'li:;r-iit*iit:]i.:; stiik. Pelhaps tirc b¿s:
rin*u,r, exarnple. altir'ugh in a:L:,;lre'¿'lult tiii'ftren'¡ 0cfltext. ls that of Elisbeig
a comrnitntertt: tl9li). l-ie cites tiie l.iil¡i;rf:lpin¡, vicri;n rr'hlr +¡qlulij {le;lri;r 1yisl1 r* ntak* ;:
h Í iilie ; ir{,.1rilriliimeiii not to ¡erveal ihe iclen'¡iiV of 11:* i<iCnapprr in order io eic3l,.*
c in io rr¡ at lo¡r t''ritü.(I htrt ha.; flo w.r) ro ur) \r'.
shali take these one i]t a time' Oi course, i1. does not lbllow tirat, i"¡er:e*ss lh,l kgal !y$tefi is r¡itiliirj,,'
withur the bargaining process' We ; to be ei'iective in enfr-rrcing in-bnrgailing ccimmitrncniri, lhat sitch (".,)r,1,,,;t
oi¡ tJ¡er*atons' 'fhe simirlesl ¡{
particulaltrv profitable' tÜ :pr'rclliete ttlents tnaV flot be enforr":*d h¿,caLtse oi th* C¿rmage thal a lailu¡r- ii) il;:jir'1'
ie t, ,, ear¡ ' if not
psychclt*ü':*u"' dominate u"'-"i*"t- ol rational issües {as in ü
rrplanation ir tirat "t equipp*d us t'-'ell rcr $ thr';u¡lr cn a cornrnitinent rr.lay incur in respeft ,-ri ;: ¡:1ayer's Ífpütai:*rn.
social euoittticr''i'it
p*ktr games u*to"' nout'-J;;t"0"' ""t
si¡ce,I:"::-;tl"::::-J":1;;.?-";" -"" * Obvruusiy, a reputat!on for 'tougl'ines:;'can i:e vcrir valueble ii i:r,ir¡li.irir,r
l::ilr-l,;il.',""''l'" *Jtions ut
ricaiuig ivitl, i:aisaining srtuations ' o,''":1?:.:T::'l:,::?*:::.-¿:lnt;$::;:;:1
isoration
u uuri.ty or ¿ii¡*r,.l"iirtues
Fnssibil'thepr'rbiirrr I rviih ar individual lvitii a reputation fr--r¡'softnesl','f'hii is anolhrr r¡airfli
our bargainirg parlnfjf$ * ,n.Trirr."rn we sitaii lake rip again under the headirrg ci'inior;i*firn'. F-or trhe lr¡r¡n:*n¡.
[::{:'",*11:ffi ii5Tr;i,*;;*ff *:*:'":::;u;l:;:r;::'j'ii1t*ftir[i
have a strong t*trtleuc-v to
p'**na that rve havenotbeenbargain-I i 7 Onc could, of course, reÉard the players al bargainirg ovr.¡ their valuatiL:irs oi thrl
iilncern*d, e'd cortiinl)
rng at ali. A Inore *nto"'*glt*
hyiothesis " *^tt*itili'in' l' 'f'ut our' hargaining$
F':ssible qoiltracts or restrict aitention ta "self-entorcing'.it:r1.racis in uhrci iJo,.]C5 ¡ie
o, *nii'l'"'ii '*'
i'"r|v"*,l). e:,changeci a little at a time (as i¡ illicit drug dealing)"
events L:"if ::tr:TT;Jil""*:r::;t:::;
i,*i,,¡uior,, i:; rhapcri \Á'ntiln aic ¡rul ¡lvar!¡+'"r
*"1,iun",ion ,*qui'"u taking account-of $
18 Or, less obviously, the Westinghouse contracts o;r uraniti*r supplr'.
r',r unli.k'el¡ io be properiy understoo<tr ;
 ú¿a¿ inirlg theory: an inio¿lucti* Nash botsainhc theory: an iñnoduction 13
l: Jv¿¡rr il
,o ¡esis,er thát *-"i,lr""ghr.
of v ¡o
wi3[ oruv assumptions::y":;::':1fr:i
"''"'' "-' rh_ey n :::;:1,;J:,:"i::":'*.",'i:i::::":::.::,?T
hoscle'¡ we wish be l::.T:1.::T:r.'1.-"
however. t¡ so far as . f the plavüs js ¡b¡e ¡o wrn rhis race. then we w¡
wrl¡our.care'* tett wfh ¡ sracketberg
-"i,,,",1^j'1...,,
made wnnuv'!
D' m¡qe '"'ln"*",fi"r
_l-li,--,,""¿*,
'.nrnnrmenr should nor bc
cJ,unnmenr
Ie sLr.trindble by appeals lo iepulction 'deas { rszs.
Lr"¿su 197c.
-o {t{ readetsiolosei game. A more
reade¡-iolloser'eajne. ¡,.*.¡"" siluÁrion wr¡ srise
mo,F irterering ^-,^_ -.
uhen rhe

ffi:'Hil'Ji ffi';:'i,'i,'"i.iiil.'
i'ens dnd wilson reóz'
ir
wrren
envrrorunenr ** "^'"
''"" **
.L-.

-i;.;
r'.""inirp rete
' r""""""q::::,*T:';il::üi:
'" '- *rr''"*-,erm 'L-
consrderarions
toni-rerm considerarion" rI
prrceiranen"ironmentúi,Tf:j.1'.I:":,".",ónore,m.onsideral,ons
^i¡.e
I | iomnltmenr race r! fior winn,hlF in,h,,
.!l-!",lr.o**o s,muha¡eoust'. ln *¡'"..
ments "n
"".s -,",,^-,"
;:iliiTffi:T;,T'':J.fflil',1j1'j:"*.,i1:':j'.:iT-:'.t.::i' ^----, -
"*. these opening s,atc.
¡nen,sm¡shrconsisror¡comprex.¡re,;";;;;;;;;;,""",,,,"-",",",._"
m'8ht consisr of¡ complex, inrerrocr<tngsysremorcondiiionalctauss
dirñcuxy
:*d,hre. Bu( ,h¿n ooe has rhe
to 3uch an exrent'n1'
"l',\:;;?";; ;;*"**br. ," {
--:r'¡¡¡urihrv
¡o, d,e un,ávelrenr ,:"¡r.ii * ,.,"v
* r€quired. rhe
¿,e l,lel! ro'¡nlrude
l¡kel) ro'inrrude T"'.-:'.;:,:,,l,;",hpv obrarn I
úll oblarn
rhey wrll ,uie t'rthe
ruie "r
lasyer" would be
rhe rasver! r.,rrh "il,.i;:;';;lo
bÉ ,. s€¿rch r..,
torsj;int
$,ioo{ r}ir rhe praven are morivared onrv b} "- -" ' il
"É "Í *r.''"r, 'o coure ofacrion forrhe
hánd I ¿'y"" *.,ia ;;l;';;;;;;í;'.;.",','": ," essence, eich
¡s" resurr ol rhe deal cu¡¡enrlv in ¡iinculrie! ,s 1o jl
oh\iotrslv lne oes¡ wdy ¡u v!6¡
il:ii3i'11."ilJ";il'l"u'*"'*i.n
,hxnooroo¡ üe ar."mpl
altempl 10 mudel the
these conc¿p:::i.:':::1i:::,,::"f,
impact ot repuraticn considerrri"ns
. r1!^ r
ra\out
I
t
:ii',iT,{
trn¿lse
rn¿lvse
i pr,y., woutd be announcins;,".;"..; ;,,"",,;-;-,^',"^ ^,_.--_ -.,
ii:'1::1f1.'i::;:
o'her e'3vers i:r'"J:T:iTi, l:- il':,'n.':"
and pe would end up wi,h a .iorlowe,-toüoser.
..rir'-
carne ro
'n.' re ¡aüsinlns s¿nes In I
rl,roüg.t hvpothesit abour comñitmert ': -T:."d *, $ $tuch lhe piayers ll h nor going to be ea\y ro sa] anyrhing very dcfi¡¡rive abour
.'r¿moder ¡ which conün hent " "' .""'li:';;*;'b;-r","r"e d* in ra''er siruarion reyona rre ,i.i ,iii.,i,,ry,s ritery to br
pl-,, ,hei, nesol i¿,ion s¡E"st:' "l' "3-v":l^l-,-" {1 'nr "¡,1-"¡",i
.u,up,,s(d inro rh€ openrns jnsran¡ ¡"-,r,", *,^, "^..,-.,^,":
Íil,lT:,::;::fi:T-lT::*;:1";;'";,'o*'*.*
rririch theY are involveu ",-FR in
{
which rhey m¿y
*T.:i':l:i'1.;l;:,ffi :::'m-:Í,J;[ 1ilffJ];',,'i'#i';i
ot the
l';1il-:l::-"r:':*:::::
_

*Hl-:-i':t1':i#":iJ::-n-",'" *-y.::::'::.::.':,';*--T::T ;l { il,'ITff"-;jfT:f:,"-'i:1.,i;i}"lJlll;*Y,:"1,,::T:-:::,:-y:f'

airc
ór"'lt" we ought tc' rillúie alsun:ptir:ns
ihe Nas;i progranl upprt''

trensiritteri to tne oPP(

"or",i,ir*, p111'*rr.- T'hiis :iiieats'

I 1''rst"fit;riic'tr xllpears in the early part cichapter I.
ccnditional ,pprolr-,iut* .or.,.,nrirrr,.,,r,
"n
irria exist *;th no ot¡vious rvalr 4¡f rlistingui:irir:g ber,,'ern ih*ni, pi*\r'r) r)l
penarty;;;;., tbr nÁ-ccrnpretion.
$
l',,:luced in tile
^1

* ** wirhirr sr¡ci-l a fiar"rewcrk'$

llo rnathematical acatrysis rs oe cossart 'f-l-t' --

b! 1n'rthei p¡'l:1¿1'
suc}r Commitn¡*nt battles
in s less abslta;t LLr"rtc';t {clrrscJ'
(i96{-), 1966) for I
19 S¡e sclielling
 l#
írtt.roduüion
Nastl batg*iníNg theory: un introductíon l5
ficrh ing fueary'" an
14 lrcrgcin
is often solved i
1g
ln assigning the entire rnotivatisrn fcrr bargaining behavicur to the efiects
problcrn' ln re¿l-lifc' tlus the t of the passage of ti¡ne" perhaps cross nverstates tl-re cane. ln the absence of
lre taced witlr a coordinatioH
g;unc
,\v us*r* ír1 essenriattv ffiffi;';'un*n t*'-lrtá''- t't:l"'lt]Ll on a cosi- ir¡lormationsl proLrlerns, however, it does seem natural tc ftrcus or nodeis
( i')6U) giues nran¡". instru:t:l:
i*umplt'' Llbvi'';t'sly' ;
ir u'hich commitÍ¡-rents can only be made to sticlt for sl.rc¡rt time peric<ls. ]n
i rsht'). Schelitng ton*i'r*ntiy'-!]l:Ottt i
unless.it *plo:ltf 't l sueir models, a player rnay threaten to delay agreernent fperhaps ¡or rver).
rrnrtl',n i¡ '¡i iro ¿reat'use '' ton'i'i*n'y r¡f the conventir¡n u-qed
t:f requinng But such a threat must be credible if it is not tg be clisn¡issed as idle bomtrast.
expkrres the conseqiiences sames' *
*ii'r" "oii'kil;;- demand Ir is the'efore na.r-u¡a! to follow stahl (19i2) in framing a non-cüopcrativs
to res<¡lve tir* coo'dinat';;;";;;-" must cosreiinate play r:n the s-1'¡¡¿- ]t
cf such a r¡.r*del in terms of the nation of a sr_rbgarne-perfett *quili
lt ls argued ,tr*, u *onui*ent convention before'
enalvsis
briu¡n. (See Section 4 and Seiten ig?5")
¡nef¡'¡c lrlasi", lrrgul*r*6
,oiution as
."rhre the clenranr
llash clenran'd
rh¿ Nash ganre '!
l"*"o'uit'-"Qrnrnitment is possible' t $tah.l (1972) looked at finite-horizon models in v¡hich lwo players alter-
Given lhal probicrn in baigaur- i
urttill.ltterminacv nate in making proposals
pr.'viries a sairsfvttre "t:";';;';;;it'^* il-t* e\¡¡'nt to which i agreement is reached {i{'e,ier). In cirapter g.
it untt""io'f'uUu't a flnite&orizon model is 'ntil
in¡ iituatiurs' Bur "vhat if there o-tallen up in chapter
7 t stu.lied in lvhich the players rnake simuliaileous
propcsals at a succession of times until a pair of compatible pr*posals is
committnents t'* *t*t'n*'ol"t*'^O'*t"nftn'J"i,,'
;¡-i
by v in cen t c' u'ut'"¿ "' ilJ';f :i:* lJ Tll;:J lfi1i::
T¡::.:,::::,?:' l *rade (if ever)- l{owever, the most signi{icant (and ceiteinry the most elegant)

# ii: i !:a :il

in srotion i:T';;f
Process \\r inin ::r:' i Tr ,,,T'-ffi ;- 1# :i3.
rl¡awfbrd studies a
model of this type is that of tr{.ubinstein {chapter 3). {n tiris moder, players
alternate irr making proposals, over a shrinking 'cake' ivith no €xogenous
than his demand'
l"*';;ü; less
to this bound on the length of time that they may bargain. und¡¡r milci conditic.,ns,
clemanding agent inforrnation which' embodies a
tv,'o-s"r* ***1""o?"*i"*n*t- with Rubinstein shows that his rnr¡de:l has a unique subgame-pt'lfect equllibriurn.
simple agents
structure. Among t-'ht;
;;;;' he'de¡nonstru"t tl"tut rati'¡nal ctratteiise chapter 5 introduces a sirnple" graphicai recfinique ror cieaiing ¡¡"iih surh
*uv lail io aE'ree' (see also
mutualiy profitatrle d;i"";;;:;;1'
rnorl*ls. with this technique. it is sh'wn thar Rubinstein'¡; csnciusion is
i983') stable under a variety r:t ncdiflcaiions ilf hi:i basir; assurx-rl,.iion$.
and Samueisori Chapter 6
provider a particuiariy simpl* pr*i;f of Rubi¡isteiri's ¡isr,ritr w!-rei,r tire und*r-
i.' ing slnlcture is sliationary lr.irh respeL't to ti¡ne as well
3"2 Tis¡re al ,:fi*ring a¡¡ inter"
esting applicatic,n i,* the eccnomics nf irvol¡lntary unenpl"ryilent.
Rubinstein's result h¿s been r:ritlcized as br:inp. very special in that the
'fherelevanceofliash'sd¿rnandgarnedepend'sheaviiyclntL'epOssibili"vtrI cl Hlcxs
irrevocabi* -t';;i';;;;n"qu' e'a''*'ti*' *o'tn sric* a' ihrt rl-s sooi.t i:ergaü'ing procedure is t,r: specific tc rind *ad5, ap¡:iicatir:1. But ihis
r:'*kiirg t0"""¡ariable threats'ljeinr' sriticism nri.sses an inrportant ¡roint: narneiy" iliat ilr,: result shoulci not b*
i9l4). This lu ul*-' "u* ot;;;t';1i-"-*:'}
ntuy n*' be Ltnccnditionall¡*
blnditig t:; e IlIer- viewec in isolation l¡ul as a conrribut.ion 1o the N, sl¡ prirgram. ln plrrriculai,
ar lhe pr:ssibilitl' ti:et d;;;;t a lilinificant x"rriailie' ii prcrvides evide¡rcr as tc the range of a¡rpiic:ition r:f li:e (as-r,n-lmetric) l{ash
it becomes to t*kt ac{'{!t'ini' t'itittt* as sir]'icture
t;i!neri, "t";;;;;; ,iuar*.1 rnori*l 1v11[ ¡nc;ugh bargai*in¡¡ solution descrlbed in seciic:r s. ln ihe la.tter parf r:f cl-lapter .l
For this reason, .,1rn";;'J..k*iii,* a t,,ri?-s¡dse (ie* alur chapler 5), it is shown that, il'tl¡*
ii finds it necessary to üsi:: ininirrral Fi¡y¡:rs hnve prelerences in iespecr
to urake iiis point, tt":"i;:';¿;lo"t r'lih':'' '¡¡iih oi'ti*rc rvhici: can be descrihed b1'' iiis;:i;rr-:int faci.ols si rnri s¡. trhen the
asstirnptlon' ui utt ('u''
rrii¡clel. Without t*t'*ii*t*' o do*ino'li roi*' Ar fir:'¡¡ {1g{rq} bargaining 'Jt¡tcor1¡rt cü¡¡1¡ei:g,e$ trl iln * l:jri]riin,:t ric hiash har¡ain!ng s*iution
*-'**-'0"'*l"uj";;;-;tJ;*u {'i¡
c+nn'.iimenl '¡iricli the'bargaining powers'f1 anrl $,. ,r* giv*il iuni:rioris of d¡ lno f,., ie.s
. )1
() bse ñ/3li llie li¡r;e interval betwe*ii s[ei;r¡is:ve ¡rcpr:sals is ai]c¡r¡tel tr; d:inirrisir t{:} ?er,.:-.
lllc syt'rific'e
"
. litn i;ciJ¿lgr:' i){ t!fi1'€ hüs
u cost ít¡- lernrs oi' bt¡th doílar:¡ 'l¡;;J unc {'r.:;-rsidering tilis lirniting case cc}rre$ponds tr-r stuiiying a irar¡llilrl::l{
.qituarion
..
ihe pottp,t:t'-"rtettt ol can5untpt;ú]" 1-lr,1ll ;r:
lihir-h trrrgaining tr'ljctions {i.e. rhe cíjsr ol delaying aqreenl*r.rt t',¡r ;i flxcd
o{ utititt' *ltici: stt:inti J"tom ,)l""rr,lir.," i'r-" *'ot' ba-rsa¡n'ng p'¡rrt't c'{ t' .'j-'lo
bie prsci.relY /iru ¿;¡¡si
w'fiic'h
ír ' tDukJ t1('t w'it¿tl'ttr ¡¡;e"i' sg¡ee d nun.¡b*r o1'periods) are negiigilrle comparerl with whai is being tradeci. It is
prárttti -**.'¿,: ^oí"' inlportani that this result is,rof speci;ll to the specifjr- ll¡iilei stutiiecl bv
fi.{}t m{ilt€r ri'lt¿n iJli'' uA,rL-!"-

at all. I{ubinstein. A very wi.le class oi variants c1'his m*ele} vi,:H the.\:d,¡/rrjton
:iusir:'r {alt}:lerugh 6¡ ancl frx may br. tiii}'erent). cirapter j examines su,rne ol'
F'oldts (196¿li a¡ h*::r'{ree also Macl-ennan l!}8ü1. what we there}oie havc ís cvid*nc¡ i,-rl.
relateql wr¡rk erl'
Cross's "¡olk and 'iht:' 'rhe ot}otatiorr $lliclr n' 1'rvi rs lepr h.'valu*
21 irt'¡ ¡n ap¡rreriatioit of ita:'i rrg::l \' ol an asvmmetrir: n-ash.llar¡¡*iiiing solution in certaift íilluauofts
tt;r.kr ,l r{¿! :rec ',t ',t''"1¿l'"* ono ["'o-'*ution in B::tlult;ing'
{ l':fi4

Jur.'ri t .:trr
r r'rf,r1r l'nrq *"*lti--""t1'l 'l'*"

l6 ,Iash bargawting tlteon': ¿7ü i'lrrtil'iLtc{tt)Íí
*ircn ti¡nsacticn ct}$is are negligible. It is tnr¡ tliat d:it* abor¡tr tlic mrni-
micr$ slÍut]Iu¡e of barg;lining i¡istitutions in usr: i:rc rinlikeiy tc¡ be srrifl-
cientlv specific iú allou' r th.'orelical calculatit'n ol'$1 lnil fi:. But this docs
ilot nte3ll that ¡j1 end f: .nilnol lle estimated eilrpiricaill'frofir observrtions
of other dt:als using the s¡¡re inst¡lr¡¡ions"
Th!.s has a bearing on w'liet has colrle to be called the'coase xhcoletn'
(Coase, t',rirtl). t¡ cil.tptel 3
ise e also chapter -{ ), Rubinstejn s}towr
tirat
Parett.n-in.fsrior. subgar"ne'perfect equilibria exist ior a'Írxed-cosl meidel
in wfrich it costs nacir plnl,'er t:t (c2 0) to d,ll*y agreemeni b)'ilirle ¡. This
¡esult sun,i,,,es i,,,hen the lime interval bett'een successive bids b*cr:nles
negligible and so lrat¡s¿ction iüsts *ease io b* sig;nilicant'
Tiris resu!r:rrtj. ¡t1orc'si¿nilicently. thai described in tii¿r previr,us para-
graph. shr.ri,il'rar tl.re irtrpact of tirne-clepenilent eosts on the strale¡-lic
t rhuoir:-,u, ol Ftra-vers does n¿t necessarily b,:c,omi negligible as the cr:sts
themselves Lrlccme rregligible. Sorile care is therr:tbre necess¿txy in inter-
preting Ihe res*lÍs i¡ lnodi-.is in wliich such cosis are set equal to zero
a prlorl-
Acfuall), the pcint is m¡re l'undamental. Suppose that the elemcnts ol
tlie descriptron ,¡f a fbrinal ganle flre listed under tiie headings
a strLiiluie of tlie ga-rne trte:
1,. preferenccs:
¡ inlil¡¡::rtion.
Tinre is ;t signliicant iai;io¡ in each ni these calegories. ln tlre quoi.rlro.'r
r:,ffered abcvt. Crr:ss (i 96tll assig¡s a domi¡ating rolc to tire nlariner i"'r
which tit.it¿ alfucts the preftrrnces oi the plarers via their atiitudes to time-
{ep;nrlent ii;sts. Eve¡r il inioirnetionai q';es'lions are lelt aside. the¡e renrains
tlr.: f.,lc rh;lr 1i:¡lc pla..s ir tll.: rlcscriptiolr (); ill. P.sjlle tree represctrtittg 'li'
inslitr:rional frarnework '¡.,irLüi which the ¡:lryers bargain - i.e. who cun iu
rvh¿i wirqtr. Rulrinslein':l rl,r¡rk i.anrl that cl otliers)?2 nrakes it clear ill;it a
classiiic¡iion oÍ e ooptrati;e bargaining corli--f ptS musi ne cessárily be f6r:nrled
olt ;i.ir airprecia¡io¡r ol the iiiif*ier¡t varieties q¡f insiitutlonai framervc'rk
v¡iihin r,''hrcir bargaining takes place. One might say that, with perfect irlfcr-
rnation. tl"L,J iii¡titutilrlal fralllervork detenlitres the qualitatit'e natu¡e of lhe
rrsult rvhile thc costi ritr¿¡mine the result quattritaÍbel.1'(even thcugir they
rn31, b,-' srnall in an absclr-rle 3ensr" j.
22 Co¡isiiler" ic,i er:arnple. {ie rerult oi rern<.^,ing the :,pparentiy harnlless assumptlon
ot Shakr.C a!1J sui¡on i11 cilspter 6 ti *ris volun":e 1h:¡! a t'irm rnusl alrva,vs listen to:n
'insiie' r!ciker's cortnie¡c;lfe¡ befar* s$'itching to an 'outsider' Withcul tiris ver¡' reason-
lbtrt, assurnption. a 1\'al¡asían {-1¡icomc,"v11! always be obtained. see alsr-¡ tsinruorr: (1983)'
$hakec anrl SuÍ1+n 11984¡, itubiü!tein and Wolinskl' (19ü4). llinüicre and Herraro
(1985), L;aie (1986).
Ndsh hargnin liig flreori'. an intrt¡dt¿ttiott l
llle lesst¡n is t.iiat. wiilio¡-ii cornmitnlei:t, onc clilIi(]t af-Í'or¡,j:-. trE,.::ri,:,,
¡iri¡ui tit* insi,itutional assuln¡rlions rnacle. Itelns which seenr of ilttle ünpu.¡.
tünce at iirsl sight can sometiúres be ol ct-.nsidcrairle signifli!:irn;J ¡nd '.r i'
repe:it our i¡bservatrions ol'Scctic¡n 2 that li¡tle enlpiricai uiirl$. tras bril
,ione lvhich is crl ii-nmediate use to a gilme theorist on this issue. Liarlr',g
chosen an úlstitutio,rai franrer¡"ork. an analysis is then nccessür\ which i:i
Lraseri on the tirne-dependent cr¡sts faced by the bargainers. Tiris raises ¡
nun¡ber of spectres. Tire first is th:e gene ral protrlein of rncrdt:llüig i¡rlormailr-n
wliicli we treat brieflv 1-.ciolv. The otlrer protrlcius are tireoretic:rl proble*ls
in gan.re tlieory. Wh¡t i:i the c)orrect *quilibriuni idea to use i¡r:rn extensivt"
fon:r ganre withoui conrmitnrerrt f What is to be don* when there a¡e rnultilrie
eqLriiibria'? These and othcr r:luestionr are tc)o large to Lr* treair'.i in mc,re
tlian a üutrsor\¡ fashion in this int¡oduction {even if rve titr:ugirt rve co*iC
providc ader¡uate msw*rs). We shall, hclv;ever, make sqntc ct¡nl:rents iri
Sc*tiari
4 .
3.3 [nformatiou
I-jntil {ai¡l}, recently. pieces on bargalning thecry had little or nothrng tü:,iri1'
about ilifo¡nlationai questions. Presurniibly this w¡s trecause I-larsenf i'"t ther:;i'
oi'garn*s of irrcomplete infor:nation'needed Iirne to perc-"olater. Flonev:r. ,.
is obvious rhat l¡rhat the ¡il;i-verr kllow clr do uot kn¿r,r'rriatleir r ¡rre'il tieai ul
practice. At tire s;ime time tllere is ihe prospect tilal the bargaining.qilivajeti:
of the '1og of war' rna)- servc tro sirrplify l-he c1a:s of cccrpr;'rai.ive scilutil:l
concel-1trs th¡t rv* need tr¡ iaki' scric¡r:l','. f-iieariy the se conccp-.ts üaJlnot depen"l
sli:iipl1, on parametrrs rvhicir iir* +nly knt wn i,rr)' tli.rÉ\roxima{elr'. Ignt rattil
r1;r!' nol be as successÍi;l a lei'eiie¡ is death, but it Lai ttr uses rn iliii iilc'tic:".
Lln the *tirer hari.l , rh¡ int¡oclL¡ciitn oi inii¡rr,latlsrnal questiol,.r i:¡r¡ r-,i.ii]'
r-:cmolicate i.hi: i¡rmei, no¡r-c¡r¡pe:ralir.e analysir of bargaining conlesls. As
f:r¡ as the Nrsli prrr*iirnr is concernc¡:1. ihis areans tl:al wc have tr:',rork mu;ir
hrrdeu l:u1 with tire hcpe of i¡ less diverse ciass af resulrs.
llll o:r¡¡rtion may 1,.e iar:xirrg a'llout a varirt-v ol íacti¡rE in bar¡aining prob-
leiris. 'I'irrs volume i:oiit+iu¡ chapteis whicli tr,;al uncertainty abol:l the extent
to rvhich commitne¡ll is rrc¡ssi'ble {chapter'i). uncertaintf ii!ri:rit i}re preÍ'er-
erices thc olhsr plírvers.nia.,,'htvi, r¡l'er the ncssible rie¿ls that c¡¡¡ be reacircil
(chapter 8) and [:ncertariri',. over time-dependeilt *r]sts (chapters I and'll.
This w¡r'k depe'rds .rn H;r'siy.rj,i's theory of '¡Earnes *f'!*cogipletc iittcrn-l¡tt.:rt'
as cliscusseil in the coniparriolr volume. The iheory rieals rvitir cliliereni-cs :r:
the inlti¡nation ihe plrver:; hav* by introducing ideai'chance mL*\'.js'1¡,'ltLrsrl
¡r-licofile is observed by st-rr'e ¡lia1'ers but not iry others. This all¡ws irid',r'rs
lo have infomratior: rvhi*h is s*cret from the other players. i{cri'evr:r. it is
jili,r!c¡rr rrjr
rii¡.,-^.+,,-+ 1... r1..,
Lrrv o,,olysis
^-., tti' ;, 'garne of incorrlpiete infoi¡lraii.',n' Lliai this
structrrre of the chance inoves tlrernseives (i.e" what cati happen ancl q,iih
ll. \rars& &crgc r*l in¡: i¡¡ i',:] ¡.tr - ú n i fi trr:" d u c t i (: ) t'l Nttsh basgaini.ng lltttsr.v: {ttt ittLr$(lLr€tiúr? lt)
i,Lxed pror:eilurs by rols.m Í{ere, as ¡rreviousli, the legal 'proüess seíyes as ii
what ¡,rrobahiiii!*s) rr¿ri be secr*t" Th;: theory lhcrefore reqrtires tiie existence
surrilgate lor a wrdtr' ¿.:lass *i í)rocedures including that via which reputations
of frn iiiiLirff¿ilottal pr:rol in the L:¿;Kgrcuntl which is üÜntmt)n knowiedge
1984). T'he basic idea is inay tle established. Fublic knorruierige is snytiling lvhir.:h may serve as an input
{Aunr:urn 1!¡ ii;. },{ertfn$ and Z3ínit lü83, b{versoil to ¡liis prccedure. ln general. public knowl*cig* will be a sub¡tt of conlnlon
reascnahly si;"nirl* but theor*¡ical diiíicr¡lties intrucle collcerilii1g hoiv hellef s
knorvledge in that publir: knowledge will bc c,-¡ntmon not only to the players
are io bqr updñi*d cln.s time ilniers ii';r pii:ture.
{,'ha¡rter I contalns an ariai}'si$ (ri }'Ji}sh's dernand ganre in an iücorrlpiete but to outsidsrs too.
infbnnation conif:{t {Sec'ilons 5, b s.iiri ?). Since comrnitment is assurned irr Any contract at which tire players anive alier bargaining must rely onf'
this analysis. llme il not a significs.iit factot and so tech¡rical prcblcÍn$ ar* cn data which are public knowledge for how else could it be enfcrced? It rnav
rlini¡.r.riz-ed" tri l¡ s|¡o*"n thilt a vetsil¡n of the asymmetric Nash L,argaining
be, for e.xampie" that the bargaining contest faced trry the players is one ol
;lclution inlrodu:*cl b5'F{arsan¡,'i tnc Seiten (1972) is relevant in il'ti¡: ;'';:r- complete information in that tl-ley face no dciubts a1.'oltt each oiitei's von
Irxt. Ciraptr:¡ ,,- inir*iXur-'es a tl:,'c-:tage rnodei. but dii'flculties wlth ii;r¡e- l{gur¡ann and i\r{orgeirstern utilitv funclirns. But it does not iollow frc¡¡n the
1'act that thi: ul.iliiv ft¡nctions ilre conlmon knowle dge arnong the pla.vers tliat
ri*:pcntl*nt beliefs er* not at issr¡*. The later part oi chapter E iSectio,r 5
r-¡r reQ) represents an eai'ili atti'mpt to grapple with these difficL¿i;ies
rviti-.cut they are puiriic knrrwledge. 'To cstablish such intbrmation in a court of law
th* l:ier theorelicsl fr¡,*rewolk r'-'hie L hecarne available - no1áilh/ the Kreps* {or ttie woricl at iarge) worild iequire an appeal to ther theory ol revealed
pref*r'encc.?s But then a piayer v,'ould have an inccntive to reveai fals* pref*r-
wil:;an {igs:ri noticn of a sequrnlial equiliilrium.'r}ris is em¡rloSred by
ence$?r' and. aithough the otirer players might be aware of the dere¡rlt'rt,
Xtubinstein in;hapter 9 wherE he *x.lenilsilisdisec¡untingurodeiol'chapter3
tothe caseinrrirr*htl'rereisincor,rpirteitforl¡ralt'rnovertheilislot-il:t frciors' they would be heiplers tú prcvent ils implement¡tion. Si¡irilar cr nsiderutl 'ns.
-i-hese
ihre* t.:hapt*;.: covei a feirl¡' i.",ide sllet:tIufn, bur ii will be appr*':iated of course, ap.'ply t,r ollier pieces of infc¡nnation ¡vhriclt lr.¡ay not be pubiic
knrlwiedge where the .playcrs have tire oir¡:oiturrity to distorl the avarlabie
that tile basic problem is tco large to l-re more than just tcuched uprln in
thls vi:.inlnc. lr;i:me¡r.rus artici+s23 l'lave been lvritten lvhich treat clifferent
er,!den ce.
Suspicion shotlld tirereiore be ciirecier.l at cooperaiive solution .ronr;eills
aspr:üts of the prrr'nier.it. bui 1{e are slill just feeling our wav in si: far
;rs the
o{ inc';rnplete inforrnafion is concer¡ieil' ivirich take íor grrntctl that cornnon know'ledge is ¡:ulrlit knowledge. r\s
lonilal a'¡rai.l,sis ci brrgaini:rg üonte5i5
chapter i I nlalq.es ci*iir il¡ the eotitr:xt of siniple barterirrg. tl-re fact tliat con-
cerieinly it i¡¡ulci lreeÍn í¡remati".ii:e l0 pontiñeate on the shape ti'iat the
tracts have to be rvritten in terms of ovlr¡.t. cen acrually be w*igired or measured
general theor-,¡ will ta-ke r:ther th*i: to obsen'""c that ii rvill l;r-' a ihegry o{' i
c¡"n ¡rtake a very grÉat rieal ni'clifferen¡,:ef - in la¡:i. ell the JifleLende betv"eell
great signilicanle.
a Walrasian r-){.itcome an'd. the Nasir b:rgaining r:cil.liiot.i.
Instead, \\,e tilrü irom rhe sitr,ration in ivhich plai'eis have infcrrnation
'fhls returns us ti:r the clornai¡r of gamr's ui i:i¡raliy we wish tr¡ enlarge on t}-le poiut ¡na.de above iibc-i;t tlte misreprestn-
whicir is secr*t frorn ea¿h other
lation of utiiíty func1.icils. I{L}.,'; dcer hlorn'iati!.ir} ¿ibsui pref'erences *.t'.nl.)
c{}rnpiet{ lnfcrmatioyl in $liich the ¡ules ol the game and the tastc.c anrl
incorpcrated in a i.roriS'ot'contl"ltt-r¡'t t-ir putrlii: kn*wledi¡cl Fresun-ralrl1", iill:
br:iiets cf the players are ccnfton kncv,'ledge. But this retuln to safer
ground
dl'*s n¡.rt eli¡ninaie in{osnaticnal questitllis altogether. Because an itr:m oi story is that prlay'trs iirquire lhis infbrtrratio:r l¡v cbseruing ihe actii:nl cf'
it ric¡es not ntcessarily follow that it il¡
rotii|non knawledge. otheis and nhserving tliaÍ 'rt}¡e¡s are carryiug ou'" siftiiar obcervatio¡ts' Ptssibly'
in1r.i¡¡¡¡¿rtion ig
laltel lreacting, we pl()pose il¡ iircluele ail inf*r- social staiistic¡ máj1,, be av:lilable for ex¡mintllol¡. Fiov,'sver', in nitisl irf tire
ptiblit.kr.au..!É,dg¡, I-i¡1¡1,g¡ tire
ar:tivities being otrserv*cl, either 1iilectl-v or i*dirilctiy, the individuals undei
rl;liftii rvhiii, ;2r bt takell Í-or granted in the draf¡u1-e {ii iontrects' This
ilrclurler ¡r:,:i": r*att*is irs ttre lUrgtiage ín which tfie plai';xs r:l:ninr¡*icafe and observation will not rrgarii tli*nrrel'¡es as fact'less alld *,i1i i:e lveii alvare th¿t
1r,r,11c1:11¡ l¿ct! JrbOul tire wi¡rid but r.''e are c6n¿erned wi¡ir
iníorrrl*ti¡n about
34 And, if any ¡rri:tencc at ¡¿alisnl i$ lil be mainiaa¡¡ed. i).t't'cl!' Freat cost.
tlit'pr'rr.trci'r wirjch ;:ln ire saiij tt l.le pr:blic. in the iast resoft, tl-lis rttf;rns
in1'or-
1.5 ls this ther:ry itcell pirbiic kno,., leCge?
nlati(ln rvh¡cir ¿¿lrl be,¡stalrlisheCi Ll e court of law tJr:ring ail actir¡r fbr hreach 26 Thc la;ge literaturc on i¡centive r:r¡¡np¿tibilit,v and soclal choice is relel¡rnt hete.
oi ¡:t-¡lttr'¡c1. See Dasgupta. -[-ia¡rmonel and l,larkin (1;?v) and Myerson 11984).
ir, : f'or¡nal irf1ri11"!*nt ol'¡iris icsa. the lawyers wcu¡ri i-'e rnocleilr,:ri nt¡t as 27 Tlri¡i is only apparently at varia*cr; wiih what i{arsrnvi (19?Tlencl otl¡e¡r lrave t¡
(.Jt?L_',i .\i::t .11..,::!.,,s of ljl,::: cu¡. hu{ as ntlnilicss auto¡11ilJ ,'x('truiing 3 lay atrout restrirting attenticn,r.ü s{ilufi,.'}ir¡ úüncepts'.vh.icli depend only t:n genuine[y
"l¿atne-theüre1rc va¡i¿lbles'. 5u{rh ais{:rt1,)n} are nlade un the irrrplicii assunption ihai itt¡:
giinrer !s pla'recl iir ísolation - i-e. indeltnrienll¡z of eriiein¿l linrtittlli{r1!s 1-i:ur liarsan.vi
i I T* ¡:i:nil,::t j-.rit e fr:rv. Ch:rtierjee ancl SamueLson (i983). Ctamtor''(t979'
{tr984),
quotes teieirllcne ltumbers as an extraneous variable aithough it is cibvious til¿t sítu¿lions
i::*{:::ri-ni:rg et el il9fll}. h{atthe\r'5 (1983). Mookherjee (1983). \15'"erscn 1982)'
exist fo¡ ruhich knowledge of a certaln l.elephone numtrer ntay be ihe r:rur.:iai i¿ctor.
:li¡r: rr*1s,rn {I? 84 } :-1cb,ri end'tr'ak¡}ri:slii i 1 9 8 3 ).
 Nash haryaiaing tkettn': sn introduc{ion
l.!reir currenI bchavir.¡ur mü,r' !¡fl¡¡st'l.e the ganies they have ro play in the
future with thrse art.'und tlle¡n. ['hr lact t]rilr tirey are observed v,,iil therelore
chaflge thei¡ beliaviour since they will need io strike a balance between
cirirelrt gains arrd potentiai ir-rture lÜsses. Where the futr¡re outrveighs tlie
pre-{dnl, a 'xn¡e' picture of th* piefeLences oi e ur-.pulation may ne!eí *fiierge.
indred, il an agent systematically reveals'faise' prei'erences, then, fronr an
o¡lerationai polrrt ol view. these ¿re ilis preterences. Eiven the agent hinrself
fespeciailv iia politician) mal,ncit be able to disiinguish at aii clearly betrveerr
his'tnre'prelerences and those he has chcsr'n to reveal cver a lon¡r -¡:eiiotl.
Chapters i0 and i I examine such nl,:de ls in tire context cif'siii;l-ril er:chluge
ccú;ronlies. The models are v¿ry simple. protiiems r:l cr,ri¡ur.titin,¡r¡. íit"ire and
i*coru¡rlete üifir¡r¡ration being rutirlessly rruncated. É1u1. th.¡iL ltrui:iur"- is
adequate to demo¡rstrate that, u'hen public knolvleclge ls restricted to Lire
conimodity b¡lndles actuall-1, barte¡ed (rather 1.har: the vr.:n lieurnann and
I!{t-rrgenstern ut.ilities ¿ttaeheo b},tl're ag*nts to t.hese hulrcles), tiren the
hargaining p¡ocess is likely ro zero ir cl¡ a wahasilan ecluilihriunr - even irr
the case when there are only'two agenrs anci so neither is negligib,l* cc;mparei.l
rvith the total size ol the 'rn¡i¡iret'. Chapter 1 I glosses the se results ir¡' pro','irJ,
ing an ilxicmatic justif ication of a Walrasi¡n e quilibrium wliich ¡rii¡¡ics Nash's
axicr¡natic defence ol the Nash bargaining sohltion e-\c('{}í in respe,:t r,i lhe
natüre of the infsrmaticn needrd to compute rhe bar¡lairring olltci)'"e.
4 THL ANIALYSJS cF j\EGOTiATIC¡{ f,Üi\-'fL]STS
R':cail that we definerl a coiriesi a.r ü game uhich is to be anaiys,-d irr thr
abseiice cf ;rrrl pre-play cornrnunicatli)i-¡ at all. A m!ni¡natr necc.ssarr.ccncition
iiri:i:nl,candidate for the solution of .cucir ¡ giinte rcust :iatisfi'is tlitt ii irc:
a Ins/t equílilsrium. This remains rrue for':r;rin*s o|inc,:rmpiere inlcl¡rnalran'
¡rrovtded these are analysed using Selten's v';rsii-¡n of t'le f{arsan},i theor},.
Tiiis requires postulntitrg an initial chance n¡ui.e which sr,.lccts tllr: plavers ir,,ito
actr-rallv participate in rhe game from know'n populations uf'polential pl;,r,crs"
':;.lcir of'who¡r is cheracteri¿ed l-.r'¡ f*;-mai Jt"lrcment i-.1 his preferrir¡es a¡rd
treliefs. The purpose of this device is tL) cr)nvert I'game riir¡u'rrmplr,::c iril¡.ir-
m¿rrrlir'fl wlth a fit\¡ .players'iilto a 6anre?6 olin)peLlcct rniorri¡atioi.r {i ,1,¡iil
marv players. The players lor {he game G a¡e the porenl¡al pleyers in the
original ganie ff- A soh¡tion irrr^Iy' is thtn identilied rrirh a si¡ir.ltitln for il ancl
lienue is tr.-r lor anriingsi lhi:,\iash rqr:ilibrie o; {,. Sucil a Nash
be sr:ught
equilibrir-rm is mathL?inntlcail.v tire s':lülf rlhi,ldt as *har is rr:ulli1, called a
13a¡ esian equiiibriunrr!' fbr,{1"
28 Strictly a'gailre of inr:orrplete infc¡nnation'ír ¡r,t :t !ürtj i,.i:ll i:', th,: r¡nse ol vLtn
\r'u¡lrann :nd N!,¡¡¡.'¡u,.' ¡1
29 .,\lthough il scems hrrsh ':hai lh.¡ itrrr:r¡:nd lJ¿r rs shrulrl l,i: i,i¿nred io¡ so mucl-r
oi which he rv;rs qrrir.e itintce nt.
Nash bargaífiing theo4,': ün intraduction 2l
A Nash equilibrrum is essentialiv a static il{)1ion - i.e. it is s:lti:iai:tcty
witliaut refilrernenl30 only tbr ga¡res in which tirne is irrelevant b*cause cach
player nra¡, tre regarded as rnaking a sltlgle ciroice in ignrlrance of the choic*s
c,f tli*: {:}ther players. As we h¿r,e obsi:rvcil earlier, such static garnes arisc
natuially in a bargaiiring ciinli"rxt when ctxtltttitinent is possible iluring 1]ie
iletgotuitious. However. in stallc bargaining contestS there is an unlbltunale
tenelency tbr the set of Nash equrliirria to bc enibarrassingly large. A cowen'
fio¡¡ is rlien rrecessaly to cletermine v,'hich ol these equilibria is t0 tre selected
as th¿ s,llr.rtion (se e chapter 2).
b-or tlynanric garllfs'il {or for gar"nes vo'tiich are forrnr'lliz static but which
lre to be anaiysecl rviih soure implicit dynamic story in nlrnd). selten (1975)
has sirorv¡'l lhat refinerttents o1 the lrlasir equilibriurri idea arc necessary'
Conside;:ation ol these refinemi"rlts iras prov'cd very proi"ltabh: in barfilrining
fheoi1.. The crur;tai papef on thi; topic ls lhat of Rubinstel:r (cliapter 3 of
tiiis v¿¡lum¿). ln sho¡t, 1.he usc l¡i Iefinements of the I{ash eqriiiibriurn idea
q,hirh erpliciti.v take inlo accoullt the d¡rnatrrics of 1h"- :1+qotiation 8anle
can resolve altogether the pioblenr of rrlr;ltiple equiliirr"iu l't:r a lairl-v wide
class ol 11,¡io-person bargaining pro'bltmi,. I-'lire* '-lyrianiic *qLiiiii::rium
itic¿:s
rvhich h;¡r,e ireen rvidely used are listed heio1,\,.
1 ¡ieriect e quililiriitn; { Selterr iq75 )' ¡\ loiash equilibriunt
,si,r&gc$le-
11,]-,icli indirces a Nasl'" eq¡iiibrium 1n e','er¡. sufrgill"i.Ie'
) Tremhlitt6'hinzcl'¡:et!'ecí e qtt!littrir,tm r,Scilil¡i 1q?5 i' A limi1 of
\asli equlli'nlii oi.perturbed gamls ill v",ilj¡;li t.'tci] ¿g,:lt is supposeci itl
tremirle in rirrkitl¡i decisi,:¡ns so thÍrL each i:v¿jlable ¡cilorr is chcscn witi:
to zero"
n I;liiri¡nuin ilro[;]biiit]" e )'0 ¡'l¡ich il then :llor'';ed iÚ recedc -lr¡ spec;if v a
{i8l)'
J Ser¡uential. ec¡uíiibritmt {K.repr arrrl Wiison I
sequeiriial e,.¡r;lliirriunr il $tats nr:}t rni.1' iilc str.lf e g,'::
is netess¡ry it)
niilch the player-t prop(rse lc lil* Lrut;rlso their beliefs. l.r:. the probe-
biliiics to be assi.gil*t'l ir no,Jcs ¡t e::ih irlibrmaiiÚl sft. \afufri 'iclÍ-
sistency requireriients er,- iitri.r*l*ti on tilcsc Lrelit:1's anrJ. stiett'Éy choie es
are then requirecl lo ir,,: r.ri¡litnal at each infonn¿ljon sL'l qir/cn tllc
beiiefs heid at 1-hat i¡liilr;riailon set and lhe sfralegir:s e:ltnlr:'i'ed elsc-
rt lr ere.
A L.r¡;tliy disquisition on these ideas u'ouid ire oul o{'place. Wt sii:lll
tlieretrort-' on1y brief-ly ¡'¡rr:ntion lofirc wellJinown cllii-ie r"rhi*s. 5uir¡¡anti:-
perfeci equiliLrric {ofteit sirnply |eieiled tt) as pcll'ei:i i:quilibria i¡i tllts
work well ior some glrues ol ¡lerlect inlom¡aiion bi¡l ilo lltit Fet
"oh,nr..)
30 $il-hility consideraiiot.¡s require postulliitig sonre ,1¡ n:rnlics r:r'i'll it 1l¡''!r' lLrIl:
lrnl',. Lrrplicitly irl the viflgs. This is n,:l tc rilr be; got,c j:1.4 il] i]rsttl.
5:¡}, ti1a1 it me"r.
late ¡cne background dr':nernics: onli tl¡at il is necesslr¡ to tre:¡r:a¡e
thal ulch a
pcsrulnte has been made and to he rc¡'Jl'to det'end it
3 j Bi *'híi:h wi ¡Í:ean a ¡ll;ltt r"'hich is nct staltc'
 r1
X,¡as& furr¿'rr*n#ry theory,; an ínftt¡ducti*¡t
their teeth sufltrcieriilv irlts rhe tlynamics Ll u s lt b argain ing t il e ory' tt in ! yt¡ ¿l uc {kt n
." ¿t
l1
tü piovide ¡nuch áLarsráílir€ \\rth the ofproblem
games cf imperfecr in{.orrnatio¡r
of murti¡ri* equiribria. that n players hargain over 1he irivision of a co;ripacr, ür;nvex
-.-supposc cake
T'rembl"ng"hand equilibria a¡e technicalty
iifficutt to cleai wirh and there ''f in utiiity space. Given ¿ i:efererice pr:i't,:i3 c .f anrl positive .tr:rrgaining
{
:j::::T:l,l11,of llrerrrcrarir,:n
when irre results depend on rhe retaiive po.wers' fit,82, .. ., 0*, n:: can clefine an (asvrnmetric) Nash barlau,,ng
r{c({uencres wr¡¡i which egents rnake trembles. sequeniiar
equiiibria present
soiution as the point s e g" ar rvhich
th* ¡rrobleni tl¡¿{ ane has to explain where
the beliefs came from since the (x, -- tr)Fr(;r, _ gr1Ér .. .(,r, _ {,)0,
results can be ven, sensitive to
beiiefs hekl at inf'rmation sets wi:ich
reached in equiribrium."R.ubins¡ein &re nevef is nr¿uiimized subject to the co¡lstraints -x ) and x e s{.
(rgs3) is instructive on this point in so ! This iun has
far as this relates to his chrpier g. been cha¡acterized Lry Roth
{197g) with a set of.thrce axioms: 'of
It rnay not be ¡::ut of o¡'der to speculate that some
at reast .sf ti¡ese r.iffi- Axiotn I : strong indiviclual rationality I
culties are due {c a reruciance to
face the issue of how prayers frnd r}reir
wily Axiom 2: indepenclence of utility calibration;
ro an equilbrium" At ieast tw. routes
can be disringuisheci which.#JJ? Axiom 3: inde pencience of irrelevant alterna rives.
c¡ibecf as educfive anc.*'oful*,e
in Binmore (lgss). The rorrner ref."ers ta
trsditional r*uts described by v.n t'e A function which'raps rrcnr pairs i.rr, g) to poi,ts of
Neun,.rr'and Morgeristern in *,irich the .f and satisiies these
equilibrating process tak*s place inside three :rxioms is necessarilv an asvmnretric Nash bargaining
the pruyrrr, heads. The ratter refers sorutirn frlr sr.,nc
to situatio¡rs in *'hicrr equiribrium is reachel set crf bargaining pow'ers
&. fu,. "",0u. \¡/itir the nclclitic¡n ol a firu¡ih axir¡rn
via an adjustn"lent pr.cess of
trial and er¡or. As we ernphasiaed in poslrlatin..3 svmmetry. the classical lrlash trar.gaiiring
soluii.n is obtaincd
the introducti,rn to the conlpanion
Econo*¿ir: organi:ations *r corrrr, game 6vith Pr -, g? ,:- . . . ,= Én).
l:lr]** theorisis nornra*v def.end
thi"ír anai'sin educriv*ly' and rnucl',""irriJ"'..""(;"il;r-rl?i'-n The Nash brrgai'ini: s'ruiion is p,;ruasive |l irrir voru*re
*_* but exr_.essive
atxempting an evcrlutive ane-trysis
rvithout treating tire backgrc,unJ .,:i.nn*,i* signific:nce shoultl nr¡t bc ailached to ihisj'l a¡: ¡ts 0ori:iranf reappear¿.inrr
arleqr-ratelv. Ltui, l¡ tile c¡_.rntext carl be atiribuir'l l.o tlrr'iri¡1!lli, llil;l¡llilied naturc t-¡f ¡iil. rnudels
cf the Nash program, a¡ edrutive ap¡:ri:ach stu¡lied. ld¡rrc
does noi elwavs t_.arry convicrion in partir:ular fhe i¡lfornr:¡¡;onal assuinpiii_rn tli;¡[ iirc orLlcr.;ln* r;f"ncgotiatir-;ns
because i, or,!¡l oo,"*
rneasure of pro-piai'comrcun.icafio¡r.-u? de1r,i:nds i:¡r'¡/i' *r¡ ,f, an<i f Tiiil rre;rvy ¡il.ci.ir¡¡rtiüÍr
But the spirit",;u,"il";;;uuni,,,
of the i{alh prergra* is " h¡s recciveri iittre attentlon
t'r nlodel sucli ¡xe-pia;' ccmmuni'-atir:n prr:surirablv l-o*causr.: i'l is not lisied as a ii:rmal;:xir¡¡¡l ,
faixrariS,- once this lr*. ü**r, ,i.oru, Br.rt, a:r rvfl i¡r¡¡.rreLi in
one is lefi ivith n*thing erse to iv*rk.¡,'itir sectiorr j. pulilic k-nr¡,¿,iedge is i-rnlikeiy ro i*elutlr piec.ist iníi¡¡¡¡aii,--¡
e;xtepí an *lrciu'ive apprr:ach, r,¡,
Flc¡rvever. recsnt progress in u tilitres.
matireniati;ar hiology sr¡ggrst$ tll:it itLis
rnay
such a i:ad thi*g pro';icied *¡e is sorilril:ing alsr¡ fieeiis to be said ¡.i-.o¡"rt r:riix¡i I rvhiefr hes i:ecn tlie
l]"t ?1 rrüt tempted lo clieat the dynamics
-, subjerl
(see ft,laynerd.Sruirh 19g2. Selren i9g3). 'ri )
ol nru,-,ir ,iehair although selcit¡m iri tile c{rfifext o{ thr:
},J.ash ¡rrogranl . con-
sirii;r a s'l;¡irc bargaining conte$t {sur:}i rs wi,ul<.1 be obtairi*d ,,uith
n,, ,rrn-
strüifiis ,¡n *onmitrnent). Suppose 1ii¡r ¡i:c plavers ciloose straleaics
1.¡*r¡
j seir ,S,,,$?. .. ,5, whici.r are inileSreritleilf .f' ;lnrl {. A funrfr.n ó:,!1 :,
TFIE NASH B"i\,RCAift..tNC SOt.i,irIO¡i ...x 5u 'í. ,T.he pay*fl, r¡e;1ur ii ptrl
+ l-Rr r.let*nnines 'a¡¡reemeilt' pa¡,.r;,iG.
provir.lecl that a:{s)€ .41 . Otherrvise ,tlisagr*ement'
r,:suils pri:iiuciirg ;r p-t\,r)tri.
so f"ar *n tire non-cooperative sitte r'*ctor n'liir.:h wr may take to be { lor simi:licir1, (al:l.rou¡il tiris
L:j::::_:::::i::j]:: of the F,iásli pro{¡aff ¡s nor st¡Ltj:l
L'LL.duls t;irl i¡ 1¡,nere reten: pr\)grCsS
haS been maCle an,l s.here tll, p:un¡r.,a,,, necessar)'for tire argumcnt). Ass¡-r¡ne that this b:rreaining
fbr ir¡medi¿te adva¡ces seern to be . I{owever. cL\rltesr;:lrr,a.r,s ir¡s
sometiring needs to he sald to an rtncquivocal solution in th* se*se that llie solution is a
expiain" the rpparent pervasiveners l",Jasi¡ equiiihríurn
of the Nash bargaíning soite¡.r¡n. {:or ¡:
reasonably cr:mprehensive accoünt ol
cooperative solut¡e.¡i'r.,n.upru taihrecl ln this
to the bargaining problenr, see R.oth 3;1 lltth l'19?:i) irr avcid.inr tile misleaCing ilescriirtio¡ r:i
ctrlirpter, we follor¡.'
1g79i.
f ! ;rs lirt 'slatus q¡jo' point.
-{ec the co¡:r:!ilrling ¡em:ihs trr !¡,,rj¡,¡1 ;. I cr 111.. s:lln,:
feiison. \\c avoid speaking of a nrod*:l rr'iih'i:i-red ihrr*tr'. Bütlt t¿.:rmc inviir:
rnisl*ariin¡
ímplicit assumptions abc!ut commi¡¡tent nossibilities.
32 The fact üat tr.o -. """'::'"..:::*^:'_1'
players know that both 34 lro significa¡ce at ali should be assiglcd to thc asseitiün th;it cn ethír:al nctiir¡ ll.r:¡¡:
t':': or
of rh
them are
ue ,..'
ttsiir-e the same giine fheóry
h,-ór. '-.... ,,^
rL,:rh r¡ir, reqaroedas a ft¡:m of implicit cominunic¿iiolr.- scciatr choice theo¡v has emerged fiom a strategic analysis. lüa¡;tr il':150 did
er¡rticitli.assumed to msrt .ín tl,e ha¡ ** ¡ut ofier,.-piur*r, ,r, I ric.i inilrir:i
f r**;oul; nia¡¡, ]-:is;t*li¿rl as an ethicai iciea and tire¡e seems no p,ocd ¡*¡son rbi *jekir-rA to r*inlilrrci
a,riom -l L.r this direüt;on
':4 Nash bwgrtittirr& ikttlrv: d¡? i¡¡fr(rJ¿df¡dofi Nasfl h*rg*ining tiir:cr1': art introtittttío¡i 15

which Pareto-dúnlirlates anv c¡thrr llasir e,:luiliirria. Suppose iliit the $,oii.íriL,n I-]e ittcnil, G. 19?1:,lf,r¡,{afu¡¡¿.{: lfono;str!-t'f'¿vter Versus Llnio¡¡ Pav't¡' lvll't
s* oi tire hargaining aolltest based on .{'and f yields the agr$eil1ent oul.come Press, Canl t¡ridge, M ;rssar:itLrsctts.
'{s*)} {. trVl-iat happens if # is rrpiaced t_ry I sui:set 1& cuirtaining { and Eilsberg, D. 19?5: 'f i"re theory orrd ¡rractir* of blackmaii. Burgeíníng: Forma!
q:{.s*) as r:r.:iitenrplate,:i in axiom -l'l ühvrously. ,r* remailis a Nash eqili}ibriunr 'I'heories oJ'Neg,otiatlcn. University r:l lilinois Presl, Urbana. Illinois.
rvhich Fareto-donrinates anv other Nash equililrria in ihe nerv gam* and Foldes, L. 19ó;4: A derterminate rnodel r¡i bilateral ntonopoly. Econainica,
therefb e is lire solution of this garne and hence rve irave a jusrific:ltion ol 31, 117-3 r.
u¿iorn 3. in rlynamic bargaining c$n{ests ('l .e. where tlne plays a role}. the F¡ied¡nan, J. 19'77: Atigo¡taly an¿l the 'fheorv of ()arnes. |iorth I{oil¿nci,
A¡nstcrCarn.
s,r¡lumenf abüvc nceds io be adapteii br¡t stiil survives in a modified form.3s
Irudenberg" D., Levine, D. anci 'Tirole , J. i983: Infinite-ho¡1¿on mr¡deis of
F'inaliy. il is necessan¡ to ecnlnlenr on the fact that ncne of the iron-
bargainirg with one-sided inco.nrplete i¡rfcnnation. Forthcoming in [toih,
{rcoperative bargaining rnodels v;hic}i have beeir iitudi*d rrn¡.h::lent the t,jash
A. {ed.) Garne'Theoretic Models rt.l'Rcrgainíng. CUP, Carnb¡idge.
i:a::gainiirg solution exartl..1,. In each cese, the iinplemeniarl cn is approxinicre Cale. D. i1)86: Bargaintng and conlpetilion. i and II. L'cantsmelríca. 54,
{or exaci only in tlie iísrit). ?85-,80{i, 80?-18.
Harsanyi. J. 197'7: Rational lllehat,iour and Bargainür¡ Er;rriirlrrur¡r in f¡:r¡¡nrs
l:i One needs th¡.| une<¡uiv+cal solution-r to subgames irvolvi¡g th* shrunken cake ¿¡id $r¡t:¿al Situations. CLrP, Cambridgr:.
.fravailabii: at time f exist ¿¿nC a¡e simi:ll related ic the soh¡ticn at time 0. l'his is¡l+¡ ilarsan.¡i, .I. and Selten, ll.. 1972: A geürralised N¡¡h s¡luticn fcr twc p;:ison
irue of the Rubinstein model (chapter l\ !¡ecause the $olution depends cn ra'hich playei
ba;gaining garnes v.'.lth incomplete info¡:natir:n" kÍun. -tri., 1S. 80- 10b
gocs fitst except in the li¡nit as tlle leñrlh of the time inie*'als is allorveel io recede to
Hichs, J. 1934: T'he 'I'h'.:or¡' o.f Wtag*'s. S{ai:rliiilan, I"rndon.
zf ro.
tr(reps, i). and Wrlson, R. 198i¡: Sequential eqr:iiiirrium. E*onametrica, 5$,
I {;3-t4.
REFLiRL-iqCES KreÍ:s, I.¡. anri Wilsnn,R. 1981b: F{epr.rt:¡iir:n and imperieci inl'orrnatio:rr
L Econ. Th.,27,253-79.
Aunrann, R.. 1976: A.grecing to dir::lgr,:e. Am. Sta¡..,4. i?-l{t*t). L¿.katos, 1,. 1t)1 5: Froofs antl P-:!'¡títz!irr¡¡.r.',jJie.l.ng¡r r;.r ltslh¡"w*ti''"tii
Binrirore, K" i9'77: Bargaini:rg, ba:rer and competitive etluilibrri.lrn, i and tf. !..i i s c ov e ry, ü r"iP, ii-l;im bridge.
Mirn*o. f-ondon $chooi cl lic*ncn:.ics. ,"04¿ll,ennan. A. i!80: Ageneraiilt' rl-ccoí1ei3Íivr-'1¡¡tont of fi:;painilrg lrr¡rktng
Birrm.]rs, lí. 1983: Bargaining anti coalitions. iCEli"D Jiseussion paper B3¡ I i^ p:iper. linir ersit',i of 'tr^r';'lc'. (.inta¡it-r.
{ ,,¡.lor .: chocl ol }.r'1r¡¡,rlc5. ,10'{athews, S. i!81: Sciling tc ii¡k av*is* b.r5'e ls wirli i,;:,:l'sr;';eb!* f 't¡;tr r.
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it{}trr'1i] |t '1'rj':r':
"
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