Bargaining

Bargaining is a way of bargaining, in which the seller and the buyer of a good or service to agree on the price and the exact terms of the transaction. Bargaining is common worldwide, although it is rare in Europe and the United States. Not every purchase is considered as suitable for the haggling. In some areas, is with the phrase "Fixed Price " expressed that haggling is not desirable.

Theories

Behavioral theory

Emphasizes the personality theory of bargaining that the type of haggling influence the process and its output. In scientific work different types including as stubborn Warrior ( Warrior) and resilient Shopkeeper (Kramer ) are referred to.

Game theory

Feilsch games are situations in which two or more players have to agree on the distribution of an object or cash amount. Each player draws in these games before an agreement one abstention, at the same time every player wants to achieve but the optimum for its interests agreement. Examples of such games would be about disputes between unions and company owners about wages, the dispute between the two communities by a defined piece of land or the conditions under which the two countries can carry out nuclear disarmament.

The analysis of such problems involves finding components that are crucial for the players involved. It can also be a separation of the goal into subgoals, so that gradual haggling can be examined.

In the classical Feilsch problem the result is ante agreement between all parties involved or the status quo. The observation of the decision-making of individual participants here is not sufficient to enable prediction of the result. The classical theory of bargaining, however, assumes that each participant in choosing between options on the model of rational choice follows. In particular, it is assumed that the preference of each player can be expressed by a von Neumann -Morgenstern utility function.

John Nash (1950 ) defined a classic Feilsch problem as a bundled assignments of benefits, one of which correspond one with an agreement, another with a failure of the negotiation.

A Feilsch problem with two players is defined as a pair ( F, d), where F is the set of possible assignments of bundled benefits and d is the disagreement point.

It is customary to follow Nash's proposal to define a specific solution by specifying the properties that will meet the solution. Some of the most commonly used are efficiency, symmetry, independence of irrelevant alternatives, scalar invariance, etc. The Nash'sche Feilsch solution is the one that maximizes the product of the value in use of the actors.

Integrative theory

This theory emphasizes the gradual approach to problem solving. Three steps can be distinguished - diagnostic phase, formulation phase and implementation phase.

Procedural theory

This theory isolated distinctive elements of the timing of haggling, to better understand the complexity of the process. Some key concepts are:

• Limits of the possible outcome
• Critical risk
• Security point
• Toughness dilemma