How to Bargain: An Interval Approach Vladik Kreinovich1;2, Hung T. Nguyen3;2,

In many real-life situations, we need to bargain. What is the best bargaining strategy? If you are already in a negotiating process, your previous offer was a, the seller’s last offer was a> a, what next offer a should you make? A usual commonsense recommendation is to “split the difference”, i.e., to offer a = (a+a)=2, or, more generally, to offer a linear combination a = k a+ (1 k) a (for some parameter k 2 (0; 1)). The bargaining problem falls under the scope of the theory of coop-erative games. In cooperative games, there are many reasonable solution concepts. Some of these solution concepts – like Nash’s bargaining solu-tion that recommends maximizing the product of utility gains – lead to offers that linearly depend on a and a; other concepts lead to non-linear dependence. From the practical viewpoint, it is desirable to come up wit