Bargaining Games

The topic to be reviewed in this lecture is included in what Bob Aumann described in his lecture as the bridges between cooperative and noncooperative theory. If I had all the time in the world, I would begin by presenting the basics of noncooperative game theory, but I cannot possibly do this. I will therefore remain very elementary, and I will be somewhat loose about the noncooperative concepts1. The flavor of what I will be doing today consists in writing down or describing game procedures, understood as non-cooperative mechanisms for interaction, discussion, and the formulation of agreements about how to split things. These bargaining procedures will be set in a context which will stay very close to the frameworks presented by earlier lecturers. We will then see how the noncooperative solutions of the bargaining procedures relate to the axiomatic procedures presented earlier by others.