Resolving a Conflict Situation with a Reference Outcome: An Axiomatic Model

We formulate an axiomatic model of conflict situations in which there exist two prominent outcomes. One is the traditional conflict outcome , the other is the reference outcome . The latter is an outcome with the following properties: (1) It is Pareto-superior to the conflict outcome, (2) It is not...

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Bibliographic Details
Published in:Management science 1988-11, Vol.34 (11), p.1303-1314
Main Authors: Gupta, Sunil, Livne, Zvi A
Format: Article
Language:English
Subjects:
Applied sciences
Arbitration
axiomatic theories of bargaining
Axioms
Bargaining
Bargaining power
Bargaining theory
Conflict
conflict resolution
cooperative games
Economic models
Exact sciences and technology
Game theory
negotiations
Operational research and scientific management
Operational research. Management science
Pareto efficiency
Political parties
Voting
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Summary:We formulate an axiomatic model of conflict situations in which there exist two prominent outcomes. One is the traditional conflict outcome , the other is the reference outcome . The latter is an outcome with the following properties: (1) It is Pareto-superior to the conflict outcome, (2) It is not Pareto optimal, (3) All the bargainers agree that the conflict's solution should be Pareto superior to it. We present a solution function for this model. It satisfies uniquely several desirable requirements. The model is an extension of Nash's Bargaining Problem paradigm, and the particular solution function we propose is a variation of the Kalai-Smorodinsky solution.
ISSN:0025-1909
1526-5501
DOI:10.1287/mnsc.34.11.1303