ABSTRACT
Chapter 5 discusses the issue of bargaining. Bargaining is the combination of cooperation and competition. We introduce the axiomatic approach and strategic approach to bargaining, the Nash Bargaining Solution to the axiomatic approach, and the Refined Nash Equilibrium of the strategic approach. The result of bargaining with complete information is certainly a Pareto optimum, but incomplete information may inhibit a Pareto efficient allocation. This chapter also discusses social norms in bargaining.
