On The Unification of Two-Person Bargaining Theory

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Abstract
Efforts to develop a deductive theory of bargaining based on the assumption of rational, self-interested behavior have produced serious disagreements among those who have approached the problem from this perspective. This paper argues that when allowance is made for important differences among types of bargaining situations, it is possible to develop a theory that is both coherent and plausible. An effort is also made to contribute to the understanding of the problem of bargaining with incomplete knowledge of the bargainers' utility functions. It is argued that an emphasis on the costs of bargaining provides the basis for a unified theory that covers both complete and incomplete knowledge.