09 October 2018

Rudolf Vetschera visited ASA, IIASA

Rudolf Vetschera from University of Vienna, Austria visited the Advanced Systems Analysis program on 9 October, 2018 and gave a talk on "Zeuthen-Hicks bargaining as a model of negotiation processes - Theoretical problems and empirical evidence". 

Abstract

Zeuthen Hicks bargaining is a dynamic bargaining model that, in contrast to other models, allows to make testable predictions about which side in a negotiation makes a concession, and the extent of these concessions. According to the model, negotiators make bargaining steps that increase the value of the product of both parties' utilities, i.e. the function that is also maximized in the Nash bargaining solution. Thus, literature argues that negotiators following the model will end up at the Nash bargaining solution.   In the present paper, we show that this is not necessarily the case. Depending on the shape of utility functions of the negotiators, the function maximized might have several local optima, so the process can fail to reach the Nash bargaining solution. We study conditions under which such multiple local optima exists both analytically an in a computational study.   Furthermore, we test, using data from experiments with the electronic negotiation support system Inspire, whether negotiators in fact act according to the predictions of the model, and whether negotiators who more frequently adhere to the model achieve better outcomes. Empirical result indicate that typically, concessions fall short of what is required by the model, but that adhering to the model's predictions would in fact lead to better bargaining outcomes.



Rudolf Vetschera studied Economics and Computer Science at the University of Vienna and Technical University of Vienna, Austria, where he also received his PhD. 1990-1996, he was full professor in Business Administration at the University of Konstanz, Germany. Since 1996, he is full professor of Business Administration with a focus on organization and planning at the University of Vienna. He has held visiting positions at the Wharton School, the University of Bielefeld (Germany), and the University of Sarajevo. He has published three books and more than one hundred peer reviewed papers in journals and collective volumes. He received the Informs GDN section award in 2012, and in the same year was ranked #8 among the university professors in Business Administration in German speaking countries in terms of lifetime research output. His main research interests are group decisions and negotiations, in particular the analysis of negotiation process, multi-criteria decision analysis and decision models under incomplete information.
Rudolf Vetschera is an alumni of the IIASA YSSP program 1980.


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Last edited: 08 November 2018

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