A Simple Bargaining Mechanism that Elicits Truthful Reservation Prices

@article{Brams2011ASB,
  title={A Simple Bargaining Mechanism that Elicits Truthful Reservation Prices},
  author={S. Brams and Todd R. Kaplan and D. Kilgour},
  journal={Cognitive Social Science eJournal},
  year={2011}
}
We describe a simple 2-stage mechanism that induces two bargainers to be truthful in reporting their reservation prices in a 1st stage. If these prices criss-cross, the referee reports that they overlap, and the bargainers proceed to make offers in a 2nd stage. The average of the 2nd-stage offers becomes the settlement if both offers fall into the overlap interval; if only one offer falls into this interval, it is the settlement, but is implemented with probability 1/2; if neither offer falls… Expand
View on SSRN
mpra.ub.uni-muenchen.de
2 Citations

2 Citations

Citation Type

Citation Type

Three procedures for inducing honesty in bargaining
TLDR
This paper discusses three procedures that induce honest offers, although they necessarily fail to achieve maximum efficiency. Expand
Mathematical Game Theory and Applications
TLDR
Several classical models used in economics are presented which include Cournot, Bertrand, Hotelling, and Stackelberg as well as coverage of modern branches of game theory such as negotiation models, potential games, parlor games, and best choice games. Expand

References

SHOWING 1-10 OF 30 REFERENCES
Three procedures for inducing honesty in bargaining
TLDR
This paper discusses three procedures that induce honest offers, although they necessarily fail to achieve maximum efficiency. Expand
Equilibrium strategies for final-offer arbitration: there is no median convergence
Final-offer arbitration is a procedure for settling disputes between two parties in which an arbitrator chooses the final offer of the party closest to what he considers a fair settlement. This… Expand
Binding versus final-offer arbitration: a combination is best
A new procedure is proposed for settling disputes which combines binding arbitration BA and final-offer arbitration FOA. Unlike either of the two pure procedures, combined arbitration CA induces the… Expand
Bargaining procedures that induce honesty
When bargaining between two actors over an object is modeled as a noncooperative game of incomplete information, equilibrium bids generally involve misrepresentation of the players' true values. But… Expand
Asymmetric Two-person Bargaining Under Incomplete Information: Strategic Play and Adaptive Learning
Publisher Summary This chapter focuses on a series of experiments investigating decision behavior in single-stage, two-person bargaining over the exchange of a single commodity, where neither trader… Expand
The Sealed-Bid Mechanism: An Experimental Study*
This paper presents the results of a set of experiments performed to test the properties of a bargaining mechanism (called the sealed-bid mechanism) used to structure bargaining under incomplete… Expand
Law and Mechanism Design: Procedures to Induce Honest Bargaining
A classic challenge in contract and property law is unstructured negotiation between two parties with asymmetric information (i.e., each party has different private information) under bilateral… Expand
Equilibria of the Sealed- Bid Mechanism for Bargaining with Incomplete Information*, '
We study the Nash equilibria of the sealed-bid bargaining mechanism with incomplete information, a nonzero-sum game. For the case of uniform priors, we describe two uncountably numerous families of… Expand
An amendment to final-offer arbitration
  • Dao-Zhi Zeng
  • Economics, Computer Science
  • IEEE International Conference on Systems, Man and Cybernetics
  • 2002
TLDR
A new arbitration procedure is proposed, which is a simple amendment to FOA that lets the arbitration settlement be determined by the loser's offer if the offers diverge, and it is shown that the offers converge in a unique pure strategy Nash equilibrium without any additional condition. Expand
An amendment to final-offer arbitration
TLDR
A new arbitration procedure is proposed, which is a simple amendment to FOA that lets the arbitration settlement be determined by the loser’s offer if the offers diverge, and it is shown that the offers converge in a unique pure strategy Nash equilibrium without any additional condition. Expand
...
1
2
3
...