A sequential bargaining protocol for land rental arrangements
DATE:
2020-04-08
UNIVERSAL IDENTIFIER: http://hdl.handle.net/11093/2502
EDITED VERSION: https://doi.org/10.1007/s10058-020-00230-7
UNESCO SUBJECT: 1207.06 Teoría de Juegos
DOCUMENT TYPE: article
ABSTRACT
We consider land rental between a single tenant and several lessors. The tenant should negotiate sequentially with each lessor for the available land. In each stage, we apply the Nash bargaining solution, as a short-cut to solving non-cooperative bargaining games. Our results imply that, when all land is necessary, a uniform price per unit is more favorable for the tenant than a lessor-dependent price. Furthermore, a lessor is better off with a lessor-dependent price only when negotiating first. For the tenant, lessors’ merging is relevant with lessor-dependent price but not with uniform price.