Bargaining over a common categorisation

Marco LiCalzi

Nadia Maagli

pp. 705-723

in: Thomas Ågotnes, Giacomo Bonanno, Wiebe van der Hoek (eds), Logic and the foundations of game and decision theory, Synthese 193 (3), 2016.

Abstract

Two agents endowed with different categorisations engage in bargaining to reach an understanding and agree on a common categorisation. We model the process as a simple non-cooperative game and demonstrate three results. When the initial disagreement is focused, the bargaining process has a zero-sum structure. When the disagreement is widespread, the zero-sum structure disappears and the unique equilibrium requires a retraction of consensus: two agents who individually associate a region with the same category end up rebranding it under a different category. Finally, we show that this last equilibrium outcome is Pareto dominated by a cooperative solution that avoids retraction; that is, the unique equilibrium agreement may be inefficient.