ABSTRACT
The theory of games has been widely used as a basis for attempts to construct a theory of the bargaining process. This chapter considers the limitations of the game theoretic approach to bargaining processes. It shows how the present framework provides a quite different form of approach. The chapter explores what limitations are overcome by this decision/expectation/adjustment model and what limitations are still inherent in it. Since the bargainers have a mutual interest in reaching some agreement within the contract zone, the bargaining process must be represented by a non-zero-sum game. R. D. Luce and H. Raiffa discuss the following solution concepts for non-cooperative non-zero-sum games: solution in the sense of Nash; solution in the strict sense; solution in the weak sense; and solution in the complete weak sense. The chapter argues that by taking the concept of a strategy as the basis of the analysis in game theory, the sequential aspects of the situation become effectively buried.
