Nash Bargaining Solution as Negotiation Concept for Resource Allocation Problem: Analysis of Experimental Data

Nikolay A. Korgin; Vsevolod O. Korepanov

doi:10.21638/11701/spbu31.2020.11

Authors

Nikolay A. Korgin V.A. Trapeznikov Institute of Control Sciences of Russian Academy of Sciences
Vsevolod O. Korepanov V.A. Trapeznikov Institute of Control Sciences of Russian Academy of Sciences

DOI:

https://doi.org/10.21638/11701/spbu31.2020.11

Abstract

Motivated by research works on Zeuthen-Hicks bargaining, which leads to the Nash bargaining solution (Vetschera, 2018), we analyze data obtained during experimental resource allocation gaming with Yang-Hajek's mechanism from the class of proportional allocation mechanisms. Games were designed in the form of negotiation to allow players to reach consensus. Behavior models based on best response, constant behavior, and Nash bargaining solution are defined. Analysis conducted over decisions made by participants shows that a significant share of all decisions leads to an increase of Nash bargaining value. It is even higher than the share of decisions that are in agreement with the best-response concept. Consensus-ended games show more but subtle attraction to Nash bargaining solution behavior. We discuss how these decisions correspond with other types of behavior actively exhibited by participants of this experiments - so-called constant behavior and with the end of negotiation process in games.

Keywords:

resource allocation mechanisms, Nash implementation, Nash bargaining solution

Downloads

Download data is not yet available.

References

Başar, T. and Maheswaran, R. T. (2003). Nash equilibrium and decentralized negotiation in auctioning divisible resources. Group Decision and Negotiation, 12(5), 361–395

Boyd, S., Parikh, N., Chu, E. (2011). Distributed Optimization and Statistical Learning via the Alternating Direction Method of Multipliers. Foundations and Trends in Machine Learning, 3(1), 1–122

Chkhartishvili, A. G., Korepanov, V. O. (2016). Adding informational beliefs to the players strategic thinking model. IFAC-PapersOnLine, 49(32), 19–23

Groves, T., Ledyard, J. O. (1977). Optimal allocation of public goods: A solution to the `freerider' problem. Econometrica, 45, 783–809

Groves, T., Ledyard, J. O. (1985). Incentive compatibility ten years later. Discussion Papers, 648

Harsanyi, J. C. (1956). Approaches to the bargaining problem before and after the theory of games: A critical discussion of Zeuthen’s, Hicks’, and Nash’s theories. Econometrica, 24(2), 144–157

Korgin, N., Korepanov, V. (2016) An Efficient Solution of the Resource Allotment Problem with the Groves-Ledyard Mechanism under Transferable Utility. Automation and Remote Control, 77(5), 914–942

Korgin, N., Korepanov, V. (2017) Experimental gaming comparison of resource allocation rules in case of transferable utilities. International Game Theory Review, 19(2), 1750006

Nash, J. F. (1950). The bargaining problem. Econometrica, 18(2), 155–162

Yang, S., Hajek, B., (2005). Revenue and stability of a mechanism for efficient allocation of a divisible good, mimeo. Urbana Champaign: University of Illinois, 35 p

Vetschera, R. (2018). Zeuthen-Hicks Bargaining in Electronic Negotiations. Group Decision and Negotiation, 28, 255–274