Three procedures for inducing honesty in bargaining

D. Marc Kilgour, Steven J. Brams, Todd R. Kaplan

    Research output: Chapter in Book/Report/Conference proceedingConference contribution

    Abstract

    A bargaining procedure, or mechanism, is a set of rules for two bargainers to follow as they make offers in order to reach a mutually satisfactory agreement on, say, a price. The efficiency of a mechanism is the expected surplus it delivers to the bargainers, relative to the surplus that a social planner would deliver, or that the bargainers themselves might achieve if they truthfully revealed their reservation prices. A theoretical limit on this efficiency is known, as is a specific procedure that achieves this maximum. But this procedure induces players to make offers that do not truly reflect their reservation prices. This paper discusses three procedures that induce honest offers, although they necessarily fail to achieve maximum efficiency. Each procedure has its own characteristics and costs, and each may have some uses in particular circumstances.

    Original languageEnglish (US)
    Title of host publicationTARK XIII
    Subtitle of host publicationTheoretical Aspects of Rationality and Knowledge - Proceedings of the 13th Conference, TARK 2011
    Pages170-176
    Number of pages7
    DOIs
    StatePublished - 2011
    Event13th Conference on Theoretical Aspects of Rationality and Knowledge, TARK 2011 - Groningen, Netherlands
    Duration: Jul 12 2011Jul 14 2011

    Publication series

    NameACM International Conference Proceeding Series

    Other

    Other13th Conference on Theoretical Aspects of Rationality and Knowledge, TARK 2011
    CountryNetherlands
    CityGroningen
    Period7/12/117/14/11

    Keywords

    • bargaining
    • incomplete information
    • truth-telling mechanisms

    ASJC Scopus subject areas

    • Software
    • Human-Computer Interaction
    • Computer Vision and Pattern Recognition
    • Computer Networks and Communications

    Fingerprint Dive into the research topics of 'Three procedures for inducing honesty in bargaining'. Together they form a unique fingerprint.

  • Cite this

    Kilgour, D. M., Brams, S. J., & Kaplan, T. R. (2011). Three procedures for inducing honesty in bargaining. In TARK XIII: Theoretical Aspects of Rationality and Knowledge - Proceedings of the 13th Conference, TARK 2011 (pp. 170-176). (ACM International Conference Proceeding Series). https://doi.org/10.1145/2000378.2000398