Lecture 7 Negotiating Strategy 1.Axiomatic (Nash) Bargaining 2.Connection to Alternating Offers 3.Voting, Stability and Group Decisions.

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Presentation transcript:

Lecture 7 Negotiating Strategy 1.Axiomatic (Nash) Bargaining 2.Connection to Alternating Offers 3.Voting, Stability and Group Decisions

Review: Thinking Hard About Group Decisions Recall: we can’t go below any person’s BATNA. –Then we thought about extending this to Groups Recall: The Core can be empty: –Three people, any one alone gets nothing –Any group of 2 gets $10 –The full group of 3 gets $12 Note that there is a Big difference between the 2 and 3 person case here with respect to efficiency…

Nash Solution Axioms (Assumptions that we’ll use to solve a bargaining problem.) –Respects affine transformations –IIA (Independence of Irrelevant Alternatives) –Pareto Efficiency –Symmetry

Voting Ways to make decisions in groups: multiple options, & multiple parties. # Voters: st :ABC 2 nd :BCA 3 rd :CAB

Next Time Readings for Next Time: –See Syllabus Prepare for group projects!