Vecon Lab Multi-Stage Bargaining: Introduction

Overview: This program implements a multi-stage, multi-issue bargaining game. Each round is a separate game consisting of a series of stages that terminate when either person breaks off negotiations to take an outside option or accepts a proposed settlement made in the previous round by the other person. At each bargaining stage, there is an exogenous determination of whether either person will be able to communicate a settlement offer to the other. Options include: both make offers each round, only one person makes offers in every round, one person is selected with a specified probability to make an offer, or alternating offers. Bargaining power can be manipulated by specifying differences between the delay costs or offer probabilities.

Bargaining can occur in one or two dimensions, with potentially nonlinear earnings amounts that determine the sets of feasible outcomes. The second dimension can be used to implement cash payments to compensate for sacrifices in the first dimension, for example. The outside option can lead to specified final earnings amounts or to a conflict with randomly determined outcomes.

Vecon Lab - June 3, 2020