WHY DO LIONS GET THE LION’S SHARE? A HOBBESIAN THEORY OF AGREEMENTS

We present a novel approach to N-person bargaining, based on the idea –inspired in Hobbes – that the agreement reached in a negotiation is determined by how the direct conflict resulting from disagreement would be resolved. The explicit modelling of the conflict game directly leads to the observation that the outcome of conflict is a function of the stakes. Thus, our basic building block is the disagreement function, which maps each set of feasible agreements into a disagreement point. Using this function and a weakening(!) of the Independence of Irrelevant Alternatives axiom, based on individual rationality, we reach a unique solution. This agreement may be construed as the limit of a sequence of partial agreements, each of which is reached as a function of the parties ’ relative power. We also give an alternative characterisation based on the mere possibility of renegotiation