bargaining problem

The bargaining problem involves two or more parties trying to agree on how to divide a limited resource or benefit. Each party has their own preferences and valuations, and the challenge is to find a fair and mutually acceptable agreement. It considers factors like each person’s alternative options and how much they value the outcome. The goal is to reach an optimal compromise that benefits all involved, balancing fairness with individual priorities. This concept is fundamental in negotiations, contracts, and economic interactions, helping to understand how parties can coordinate and reach agreements despite conflicting interests.