Advances in Negotiation Theory: Bargaining, Coalitions and Fairness

Carlo Carraro

Fondazione Eni Enrico Mattei (FEEM); Ca’ Foscari University of Venice; CMCC – Euro Mediterranean Centre for Climate Change (Climate Policy Division); IPCC; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Centre for European Policy Studies, Brussels; Green Growth Knowledge Platform; International Center for Climate Governance

Carmen Marchiori

Fondazione Eni Enrico Mattei (FEEM); University College London

Alessandra Sgobbi

Fondazione Eni Enrico Mattei (FEEM) ; Centro Euro-Mediterraneo per i Cambiamenti Climatici (CMCC)

February 2006

FEEM Working Paper No. 66.05
World Bank Policy Research Working Paper No. 3642
University Ca’ Foscari of Venice, Dept. of Economics Research Paper Series No. 08/06


Bargaining is ubiquitous in real-life. It is a major dimension of political and business activities. It appears at the international level, when governments negotiate on matters ranging from economic issues (such as the removal of trade barriers), to global security (such as fighting against terrorism) to environmental and related issues (e.g. climate change control). What factors determine the outcome of negotiations such as those mentioned above? What strategies can help reach an agreement? How should the parties involved divide the gains from cooperation? With whom will one make alliances? This paper addresses these questions by focusing on a non-cooperative approach to negotiations, which is particularly relevant for the study of international negotiations. By reviewing non-cooperative bargaining theory, non-cooperative coalition theory, and the theory of fair division, this paper will try to identify the connection among these different facets of the same problem in an attempt to facilitate the progress towards a unified framework.

Advances in Negotiation Theory- Bargaining, Coalitions and Fairness

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