Interim agreements

Abstract Processes of bargaining are studied in which the players reach interim agreements that serve as status quo points for further bargaining. This is modeled in Nash’s setup of bargaining problems, where the solution is a time parameterized path of interim agreements rather than a single point. We characterize path solutions for linear problems that satisfy the axioms of restarting and covariance , and show that if a Pareto efficient agreement is not reached immediately, then it is never reached in finite time. Adding the axioms of individual rationality , relevance , and monotonicity , we characterize the family of continuous Raiffa solutions and show that these solutions converge to a Pareto efficient agreement but never reach it in finite time. Finally, if a deadline is added to the bargaining problem, and the speed of bargaining is proportionally inverse to the deadline, then a Pareto efficient agreement is reached exactly at the deadline.