ABSTRACT
This chapter examines some issues relating to the internal consistency of a wide class of bargaining models. It explores what appears to be a central theoretical problem in dealing with decision-making in an environment containing only one other decision-maker. The chapter analyses the distinction between self-replacing and self-generating decision rules. The question of the consistency of decision-making and expectations may conveniently be referred to as the Cournot problem since it arises most forcefully and perhaps in its best known form in A. Cournot's theory of duopoly. The chapter describes a very simple game model of the bargaining process. It explores what might be the limitations of the environment concept to aid in the analysis of the decisions of each bargainer. The decision-maker may carry out all kinds of reasoning about the environment but the possibility always arises that the environment may equally well be carrying out the same reasoning about him.
