“We didn’t want a strike. We want a solution as soon as possible.”
-Jose Luis Rodriguez Salazar, secretary-general of the Independent Union of Volkswagen Workers
Ariel Rubinstein is an Israeli economist who has done lot of work in area of Game Theory esp. its application in area of bargaining. In 1982, he published “Perfect equilibrium in a bargaining model” in which he outlined a model of bargaining called as Rubinstein bargaining model.
The model consists of two players, who during game keep making alternating offers. It describes two-person bargaining as an extensive game with perfect information in which the players alternate offers. The first player makes an offer in the first period, if the second player rejects, the game moves to the second period in which the second player makes an offer, if the first rejects, the game moves to the third period, and so forth. The game goes on…
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