bargaining model

A bargaining model is a way to understand how two or more parties negotiate to reach an agreement. It considers the interests, priorities, and outside options of each side, as well as how much they stand to gain or lose. The model predicts the outcome based on these factors, illustrating how compromises and power dynamics influence the final deal. Essentially, it helps explain the strategic process behind negotiations, showing that the outcome depends on the parties’ alternatives and their willingness to make concessions.