ABSTRACT
This chapter describes a particularly simple small group process–two-person bargaining. In the theory of markets it has been possible to deal theoretically with the interaction of many economic actors by supposing that each one acts in an 'environment' characterised by some representation of the aggregate behaviour of all the remaining actors. The chapter also describes the theory of the bargaining process from the point of view of individual decision-making, although the decision-making model will be of the simple utility maximising rather than the game theory type. As the work of J. G. Cross has shown, the game theory approach allows one to take the emphasis away from strategic reasoning within a static framework in order to look at the sequential aspects of the process of action and re-action taking place within the bargaining situation.
