“A Theory of Bargaining”

“A Theory of Bargaining” analyzes how two or more parties negotiate to divide a resource or reach an agreement. It explores how their respective outside options, preferences, and the perceived value of the deal influence their bargaining power. The theory predicts the outcomes of negotiations, such as how much each side gains, based on their alternatives and the strength of their positions. Essentially, it provides a structured way to understand the strategic decisions people or groups make when they negotiate, showing how different factors shape fair and efficient agreements.