Browsing by Subject "Bargaining"
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Item Open Access Analyzing strategic behavior in a dynamic model of bargaining and war(Springer, 2023-09-19) Doğan, Serhat; Keskin, K.; Sağlam, ÇağrıWe analyze a dynamic model of bargaining and war with two states located on a linear territory. One state demands a portion of the other state’s territory each period such that if the latter state makes a concession, the former state takes control of the demanded portion. If otherwise, the two states engage in warfare to decide which state controls the disputed portion of territory. À la Fearon, we consider a model in which the states bargain over objects that influence future bargaining power. That is, it is valuable to have more territory, not only because it brings higher utility, but also because it increases future bargaining power, as it can be used to generate military resources in wars to come. We implicitly characterize the unique Markov perfect equilibrium of the model, and utilizing a set of parameter values, we illustrate that there are six different types of equilibrium outcomes. We then provide a variety of historical examples and argue that our model is able to capture their patterns and characteristics.Item Open Access Bargaining in institutionalized settings: the case of Turkish reforms(Sage Publications Ltd., 2010) Sarigil, Z.By analyzing the case of a bargaining situation in an institutionalized setting, which derives from Turkey's reform process in a sensitive issue area (civil-military relations), this study assesses the explanatory power of competing models of bargaining: rational, normative, and discursive/argumentative. The bargaining outcome in this case was puzzling because despite the existence of a strongly pro-status quo veto player (i.e. the military), the bargaining processes led to a new status quo.This study shows that the veto player simply failed to prevent a shift to a new status quo because such an action would do substantial damage to the military's ideational concerns (normative entrapment). The rational model remains under-socialized, while the discursive model is over-socialized in analyzing this bargaining situation. Although the normative model sheds more light on this puzzling outcome, a synthesis between normative and rational models would provide us with much better insight. © The Author(s) 2010.Item Open Access Bargaining under time pressure from deadlines(Springer, 2019) Karagözoğlu, Emin; Kocher, M. G.We experimentally investigate the effect of time pressure from deadlines in a rich-context bargaining game with an induced reference point at the 2/3-1/3 distribution. Our results show that first proposals, concessions, and settlements are very similar for different time-pressure levels. Nevertheless, time pressure systematically influences the type of agreements reached: the likelihood of bargainers reaching agreements on the equal split is lower under time pressure. Furthermore, disagreements and last-moment-agreements (conditional on reaching an agreement) are more frequently observed under time pressure, though the effect on last-moment agreements disappears when disagreements are included in the analysis. Finally, the effect of time-pressure on the frequency of disagreements is stronger for those pairs with higher tension in first proposals.Item Open Access Costly preparations in bargaining(Blackwell Publishing, 2020) Karagözoğlu, Emin; Rachmilevitch, S.We model costly preparations in negotiations and study their effect on agreements in a bilateral bargaining game. In our model, players bargain over a unit pie, where each player needs to pay a fixed cost in the beginning of every period t, if he wants to stay in the game in period t+1 in case a deal has not been reached by the end of t. Whether a player has paid this cost (i.e., prepared for negotiations in t+1) is his private information. If only player i stops paying, then player j receives the entire pie. We characterize a “war of attrition” equilibrium, which is a symmetric equilibrium. We do not know whether the game has other symmetric equilibria, but we show that if such an equilibrium exists, its payoff converges to zero as the frictions (discounting and preparation cost) vanish. Efficiency can be obtained by asymmetric play. Specifically, with asymmetric strategies every Pareto‐efficient payoff vector can be approximated in equilibrium, provided that the cost of preparations is sufficiently small and that the discount factor is sufficiently close to one.Item Open Access A Game theoretic model on post-insolvency procedures(Bilkent University, 2017-09) Baytemür, DenizThis thesis utilizes the game theory literature with asymmetric information to model post-insolvency options of the indebted firm. We center the study on Turkish bankruptcy system and compare the system to an alternative state, which is namely the Benchmark state. In the first state, the indebted firm has three options: Liquidation, Reorganization, and Adjournment of Bankruptcy; while the last option, which is unique to Turkish system, is not available in the latter. These two systems are compared in terms of resulting welfare of the creditor. The comparison indicates that the Benchmark state generally serves better to creditor. However, in certain cases this relation is reversed and effects of the changes in model parameters in these two states are different.Item Open Access (In)efficiency and equitability of equilibrium outcomes in a family of bargaining games(Springer, 2022-11-21) Karagözoğlu, Emin; Keskin, K.; Sağlam, ÇağrıWe construct a parametric family of (modified) divide-the-dollar games: when there is excess demand, some portion of the dollar may disappear and the remaining portion is distributed in a bankruptcy problem. In two extremes, this game family captures the standard divide-the-dollar game of Nash (Econometrica 21:128–140, 1953) (when the whole dollar vanishes) and the game studied in Ashlagi et al. (Math Soc Sci 63:228–233, 2012) (when the whole dollar remains) as special cases. We first show that in all interior members of our game family, all Nash equilibria are inefficient under the proportional rule if there are ‘too many’ players in the game. Moreover, in any interior member of the game family, the inefficiency increases as the number of players increases, and the whole surplus vanishes as the number of players goes to infinity. On the other hand, we show that any bankruptcy rule that satisfies certain normatively appealing axioms induces a unique and efficient Nash equilibrium in which everyone demands and receives an equal share of the dollar. The constrained equal awards rule is one such rule.Item Open Access Kantian equilibria of a class of nash bargaining games(Bilkent University, 2021-08) Dizarlar, AtakanThis thesis studies Kantian equilibria (Roemer, 2010) of an n-player bargaining game, which is a modified version of the well-known divide-the-dollar game. It starts with introducing the fundamental concepts of Kantian morality and how Kantian moral theory is captured in economic theory. Then, we first show that the Kantian equilibrium exists under fairly minimal assumptions. Second, if the bankruptcy rule used satisfies equal treatment of equals, and is almost nowhere proportional, then only equal division can prevail in any Kantian equilibrium. On the other hand, we show that an ‘anything goes’ type result emerges only under the proportional rule. Furthermore, using hybrid bankruptcy rules that we construct in a novel fashion, we can characterize the whole equilibrium set. Lastly, we analyse what happens to the equilibrium behavior and the axiomatic properties of the bankruptcy rules under the additive definition of Kantian equilibrium. Our results highlight the interactions between institutions (axiomatic properties of division rules) and agents’ equilibrium behavior.Item Open Access The n-person Kalai-Smorodinsky bargaining solution under pre-donations(2011) Akin, S.N.; Platt, B.C.; Sertel, M.R.This study examines the behavior of simple n-person bargaining problems under pre-donations where the Kalai-Smorodinsky (KS) solution is operant. Predonations are a unilateral commitment to transfer a portion of one's utility to someone else, and are used to distort the bargaining set and thereby influence the bargaining solution. In equilibrium, these pre-donations are Pareto-improving over the undistorted solution; moreover, when the agents' preferences are sufficiently distinct, the equilibrium solution coincides with the concessionary division rule. © 2010 Springer-Verlag.Item Open Access Nash bargaining solution under predonation(Bilkent University, 2008) Akyol, EthemWe consider two person bargaining problems under predonation. Before the bargaining solution is applied we allow the alteration of the bargaining set by means of pre-donations of a share in one’s would-be payoffs to one’s opponent. Thus, a pre-bargain stage is instituted in which the bargainers may manipulate, via pre-donations, the (Nash) bargaining solution as applied in the next stage.We firstly concentrate on the simple bargaining problems with bargaining sets that have linear pareto frontier and show that the stronger bargainer (with greater ideal payoff) giving a pre-donation, her best pre-donation transforming the bargaining set into one on which the Nash bargaining solution distributes payoffs so that while other bargainer gets exactly the same payoff (as applied to the original simple bargaining problem), stronger bargainer makes strictly better off. Then, we look for Stackelberg and Nash equilibria of the so called ”predonation game”. Furthermore, we list our results for two by two normal form games.Item Open Access On the influence of hard leverage in a soft leverage bargaining game: the importance of credible claims(Academic Press, 2016) Bolton, G. E.; Karagözoğlu, E.What makes a bargaining proposal credible? We study how hard leverage (binding commitment) influences soft leverage (appealing to a focal point) in a rich-context bargaining game known to exhibit competing claims to focality. In three treatments, our experiment varies one bargainer's ability to commit, holding the soft leverage condition fixed. As in previous studies, we observe that opening offers are consistent with the available soft leverage. The influence of hard leverage is most evident in the concessionary stage. Hard and soft leverage interact to influence outcomes: Hard leverage advantages its holder, yet settlements largely stay between the two focal points. We posit that focal points induce mutual expectations of bargainer social preferences that, when combined with the Nash bargaining solution, imply the comparative statics concerning the settlements observed. A similarly modified version of the Zeuthen–Harsanyi model of the bargaining process, agrees with the comparative statics on opening offers and concessions. © 2016 Elsevier Inc.Item Open Access Performance information, production uncertainty, and subjective entitlements in bargaining(INFORMS, 2015) Karagözoğlu, E.; Riedl, A.We experimentally explore the effect of performance information and production uncertainties on (i) subjective entitlements derived from the production process and (ii) bargaining over the jointly produced surplus. We hypothesize that performance information and details of the production process affect entitlements, which in turn influence bargaining behavior. We find that, without performance information, subjective entitlements are mostly mutually consistent, and bargaining mainly ends with an equal split. In stark contrast, negotiators derive strong, mutually inconsistent, subjective entitlements when there is performance information. These subjective entitlements affect opening proposals, concessions, and bargaining duration and lead to asymmetric agreements. Moreover, given performance information, endogenous variations in entitlements influence bargaining, suggesting an independent role of subjective entitlements. Production uncertainties influence bargaining, especially when performance information is present, but do not substantially mitigate the effect of entitlements. Theoretical bargaining models allowing for reference points or fairness principles can partly account for the empirical results. Yet, important aspects are left unexplained and our results suggest ways for extending these models. © 2015 INFORMS.Item Open Access Signaling bargaining power: strategic delay versus restricted offers(Springer, 2000) Bac, M.I study the first-round separating equilibrium of a buyer-seller bargaining game, extended to allow for asymmetric information, strategically delayed offers and offers restricted to a portion of the good. When bargaining is over a consumption good, in equilibrium the “strong” buyer uses a restricted offer if his optimal consumption path is conservative relative to the “weak” buyer. A pure restricted offer may even be a costless, efficient signal. When the good is durable, a pure strategic delay is involved in signaling a strong bargaining position if the discount factor is high.Item Open Access Time-varying fairness concerns, delay, and disagreement in bargaining(Elsevier, 2018) Karagözoğlu, Emin; Keskin, K.We study an alternating-offers, bilateral bargaining game where players may derive disutility from accepting shares below what they deem as fair. Moreover, we assume that the values they attach to fairness (i.e., their sensitivity to violations of their fairness judgments) decrease over time, as the deadline approaches. Our results offer a new explanation to delays and disagreements in dynamic negotiations. We show that even mutually compatible fairness judgments do not guarantee an immediate agreement. We partially characterize conditions for delay and disagreement, and study the changes in the length of delay in response to changes in the model parameters.Item Open Access Understanding the experiences of the politics of urbanization in two gecekondu (squatter) neighborhoods under two urban regimes: ethnography in the urban periphery of Ankara, Turkey(The Institute, Inc., 2011) Erman, T.This article investigates the politics of urbanization in the Turkish context. It is built upon the premise that the "urban coalition" in the era of nationalist developmentalism, which was populist in nature, is replaced by a "new urban coalition," a neoliberal one, since the 1980s. I argue that the bargaining power of gecekondu (squatter) residents with municipal authorities for their "extra-legal" practices in building their houses in the former era was lost after neoliberal policies were adopted. This argument is substantiated by the ethnographic fieldwork in which the experiences of gecekondu residents in building, improving and (not) defending their houses and neighborhoods were obtained. Two ethnographic studies were conducted in two different sites in Ankara: a neighborhood where the Alevis were the majority, which became the site of leftist mobilization in the 1970s, and a district where conservative Sunnis lived, who supported right-wing politics. By situating the two neighborhoods in the context of the two different urban regimes, namely, those in the populist and neoliberal eras, the article points out the changing relationship of the gecekondu residents with the state, showing variances with respect to the differing political positions and social compositions of the two neighborhoods. © 2011 The Institute, Inc.