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Refining Raiffa – Aspiration Adaptation within the Zone of Possible Ag

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Published/Copyright: November 30, 2019
German Economic Review
From the journal German Economic Review Volume 17 Issue 3

Abstract

One of the most well-known descriptive bargaining models is Raiffa’s Zone of Possible Agreements (ZOPA). We reinterpret Raiffa’s model of a price negotiation in the realm of bounded rationality by applying Simon’s theory of Satisficing. Afterward we refine Raiffa’s negotiation model using Aspiration Adaptation Theory as suggested by Sauermann, Selten, Tietz and others. We offer a model of a concession process that gives precision to the Dance of Concessions in Raiffa’s model by applying axioms of bounded rationality. Raiffa suggests a solution point derived from equity in price dimension, whereas we propose an area solution defined by equity in aspiration levels.

Keywords: Aspiration adaptation theory; bargaining; bounded rationality; satisficing; ZOPA
Published Online: 2019-11-30
Published in Print: 2016-08-01

© 2019 by Walter de Gruyter Berlin/Boston

Articles in the same Issue

  1. Foreword: Special Issue in Honor of Reinhard Selten’s 85th Birthday
  2. Impulse Response Dynamics in Weakest Link Games
  3. Refining Raiffa – Aspiration Adaptation within the Zone of Possible Ag
  4. Designing Institutions for Social Dilemmas
  5. On the Value of Transparency and Information Acquisition in Bargaining*
  6. Public Statistics and Private Experience: Varying Feedback Information in a Take-or-Pass Game
  7. An Experiment on Forward vs. Backward Induction: How Fairness and Level k Reasoning Matter
  8. Social Interaction Promotes Risk Taking in a Stag Hunt Game
https://doi.org/10.1111/geer.12096
Keywords for this article
Aspiration adaptation theory; bargaining; bounded rationality; satisficing; ZOPA

Articles in the same Issue

  1. Foreword: Special Issue in Honor of Reinhard Selten’s 85th Birthday
  2. Impulse Response Dynamics in Weakest Link Games
  3. Refining Raiffa – Aspiration Adaptation within the Zone of Possible Ag
  4. Designing Institutions for Social Dilemmas
  5. On the Value of Transparency and Information Acquisition in Bargaining*
  6. Public Statistics and Private Experience: Varying Feedback Information in a Take-or-Pass Game
  7. An Experiment on Forward vs. Backward Induction: How Fairness and Level k Reasoning Matter
  8. Social Interaction Promotes Risk Taking in a Stag Hunt Game
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