INSTITUTE OF MATHEMATICAL ECONOMICS

Matthias G. Raith

Working-Paper No. 300

July 1998

Abstract

By viewing negotiation problems as problems of fair division, one can apply intuitive procedures to a variety of complex conflicts. This, however, requires the negotiated issues to be interpreted as items to be divided among the parties involved. In this paper, we go in the opposite direction and reformulate fair-division algorithms as practical, cooperative negotiation procedures, in order to apply them to a more general class of multiple-issue negotiations. We study three qualitatively different but related approaches that consist of two simple and intuitive steps. The first step ensures an efficient outcome, and the second step establishes "fairness" through a redistribution of gains. We show that the distribution mechanisms have different procedural implications, when they are used in `issue-by-issue´ negotiations.

Keywords: Bargaining, Fair-Division, Multi-Issue Negotiations

The Paper in PDF-Format to view with Adobe Acrobat Reader^®. fnp.pdf (1013k)

Get free Adobe Acrobat Reader^® here!