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Recent US federal court rulings have provided new guidance on the use of economic models of bargaining in estimating reasonable royalty damages in patent cases. After reviewing relevant case law and providing an overview of the bargaining range approach, we describe one analytic method (the Rubinstein Bargaining Model) for developing a quantitative starting point with which to divide a bargaining range and explain how it can be tied, at least in part, to the facts and circumstances of the parties around the time of the Hypothetical Negotiation. We also describe how this approach can be used in conjunction with an analysis of other quantitative and qualitative factors related to the bargaining power of the parties, to help estimate reasonable royalty damages.

In the shipping industry, both sales and purchases of second-hand ships and freight transport services are prevalently tailormade and traded with intense bilateral negotiations. Price bargaining is the key step of this negotiation process and plays a crucial role in determining mutually agreed prices. Despite its cruciality and applicability, the price bargaining has yet received due conceptual and/or theoretical attention in the shipping literature. This paper attempts to conceptually examine the role of bargaining in shipping transaction prices and subsequently puts forward directions for future research. In doing so, the paper focuses on two types of transactions taking place in shipping markets: asset market trading of second-hand vessels and service market trading shipping freights.

The paper begins with a systematic literature review of price bargaining in the field of economics and management disciplines from a game-theoretic perspective. This approach does logically lead to the establishment of a conceptual framework for price bargaining in shipping sub-markets as a step toward having taken into consideration a variety of heterogeneities commonly present in trading activities and market dynamics.

A set of research areas has been consequently identified where price bargaining and mechanisms for the shipping freight and asset markets could be further explored and analyzed in a way to make better pricing decisions under a more tangible framework.

One of the critical challenges when using bargaining mechanisms to make a decision on pricing shipping services and assets is how to operationalize the study for empirical investigation as some of the factors are internal information of the players and are not adequately revealed to externals: that is, an imperfect information sharing case. The current study aims, however, not to conduct an empirical analysis but to initiate a conversation among maritime economists by bringing their attention to this not-yet fully explored and potentially impactful field of research and by asking them to treat bargaining from a perspective for pricing shipping assets and services. It is claimed that, by doing so, one could better understand price differences between individual contracts.

This study would be considered the first of its kind to provide a detailed survey of the bargaining theory and models from a game theoretical perspective as a theoretical lens to understand its importance and relevance in pricing shipping assets and services. It also provides a simplified operational case on utilizing bargaining in practically pricing freight services.

To model a bargaining environment where the tactic of qualitative commitment (staking a principle) can have a demonstrably strong effect.

Amend the two‐person alternating offers model due to Rubinstein to include simultaneously pre‐announced stakes, and a mechanism for altering agents' utilities by reference to substantial costs of “surrendering a principle” (capitulation costs). Identify all stationary, pure strategy equilibria. Isolate subgame perfect Nash equilibria (SPNE).

SPNE is unique and offers efficient re‐allocation. For high enough capitulation costs, gains at equilibrium (relative to the bench‐mark game without commitment) result to the first‐mover. The shift in the equilibrium allocation is linear in cost.

Symmetric fixed capitulation costs were assumed. Surrender of principle required introduction of discontinuities in the cost function (zero or fixed cost). No gradation of the cost was considered. Future directions could involve discovering what distortions are created by asymmetric costs, by gradations and from smoothing out of the discontinuity.

Practical implications at best point to the potential rewards available from identifying and introducing a high‐cost commitment tactics in a bargaining context.

The innovation is in the use of an explicit bargaining apparatus to examine the commitment tactic (previous research used an axiomatic treatment of bargaining), and in offering a model for the notion of a qualitative commitment. The result about the qualitative shift in the equilibrium is also new. The paper is thus a contribution to the understanding of how an agent may seek to influence the outcome of a game such as “divide the pie (the resource)” through the manufacture/introduction of a factor outside the original game.

With rising environmental concerns, recent years have witnessed a significant surge of academic and corporate interest in green supply chain coordination (GSCC). This is evident from the rise in channel coordination literature focused toward the elimination of sub-optimal in the green supply chain (GSC). This paper seeks to summarize the model-based research on coordination in GSCs with the help of a framework developed specifically for this paper. The purpose of this paper is to present an in-depth analysis of the widely used models in the area.

A review of literature is presented in this paper to examine the underlying concepts peculiar to GSCC. A classification framework is developed to present an exhaustive survey of commonly used concepts.

Around 90 percent of the papers on GSCC come from game theory (GT) application, which explicitly utilizes coordination through contracts. The review concludes prospective area of research in GSCC. The study posits that there exists a potential of creating a more rational and efficient coordination strategies to improve GSC’s operational performance, with the view of the optimum distribution of resources and better environmental management.

To the best of authors’ knowledge, this is the first state-of-the-art review of GSCC literature focused primarily on mathematical model-based literature. This review identifies various methodological and content-oriented characteristics of GSCC. The paper also opens avenues of future research.

Reverse supply chain (RSC) is one of the ways to handle product returns efficiently. Recovery of residual value from product returns also helps in achieving sustainability. Its successful implementation requires coordination among all the channel members involved in the activities, from the acquisition to collection to the disposition of returned products. This article aims to review the literature about coordination issues in the RSC.

A systematic literature review of 151 articles published during 2004–2021 is carried out. Theory, context and methodology (TCM) framework of the literature review is used to identify the research gaps for future research directions.

This study identifies the characteristics of RSC coordination. It includes channel structures; coordination mechanisms; performance measuring parameters; the methodology applied and explored industries. The review shows that game-theoretical modeling in RSC coordination is the most commonly used method to coordinate the channels. It was found that issues like disruption, fairness and corporate social responsibility are not explored in-depth and offer much potential for future research.

There are very limited studies on coordination issues in the RSC. The proposed articles add value by considering RSC issues from different strategic, government, consumers' behavior and functionality decision-making point of view.

This paper aims to find optimal emission reduction investment strategies for the manufacturer and examine the effects of carbon cap-and-trade policy and uncertain low-carbon preferences on emission reduction investment strategies.

This paper studied a supply chain consisting of one manufacturer and one retailer, in which the manufacturer is responsible for emission reduction investment. The manufacturer has two emission reduction investment strategies: (1) invest in traditional emission reduction technologies only in the production process and (2) increase investment in smart supply chain technologies in the use process. Then, three different Stackelberg game models are developed to explore the benefits of the manufacturer in different cases. Finally, this paper coordinates between the manufacturer and the retailer by developing a revenue-sharing contract.

The manufacturer's optimal emission reduction strategy is dynamic. When consumers' low-carbon preferences are low and the government implements a carbon cap-and-trade policy, the manufacturer can obtain the highest profit by increasing the emission reduction investment in the use process. The carbon cap-and-trade policy can encourage the manufacturer to reduce emissions only when the initial carbon emission is low. The emission reduction, order quantity and the manufacturer's profit increase with the consumers' low-carbon preferences. And the manufacturer can adjust the emission reduction investment according to the emission reduction cost coefficient in two processes.

This paper considers the investment of emission reduction technologies in different processes and provides theoretical guidance for manufacturers to make a low-carbon transformation. Furthermore, the paper provides suggestions for governments to effectively implement carbon cap-and-trade policy.

This issue of Research in Law and Economics covers several areas of important research by a variety of international scholars. It contains technical papers on the appropriate way to estimate damages in patent disputes, as well as methods for evaluating relevant markets and vertically integrated firms when determining the competitive effects of mergers and other actions. There are also papers on the implication of different legal processes, regulations, and liability rules on consumer welfare, which range from the impact of delays in legal decisions in labor cases in France to issues of criminal liability related to the use of artificial intelligence.

This article aims to establish a dynamic Energy Performance Contract (EPC) risk allocation model for commercial buildings based on the theory of Incomplete Contract. The purpose is to fill the policy vacuum and allow stakeholders to manage risks in energy conservation management by EPCs to better adapt to climate change in the building sector.

The article chooses a qualitative research approach to depict the whole risk allocation picture of EPC projects and establish a dynamic EPC risk allocation model for commercial buildings in China. It starts with a comprehensive literature review on risks of EPCs. By modifying the theory of Incomplete Contract and adopting the so-called bow-tie model, a theoretical EPC risk allocation model is developed and verified by interview results. By discussing its application in the commercial building sector in China, an operational EPC three-stage risk allocation model is developed.

This study points out the contract incompleteness of the risk allocation for EPC projects and offered an operational method to guide practice. The reasonable risk allocation between building owners and Energy Service Companies can realize their bilateral targets on commercial building energy-saving benefits, which makes EPC more attractive for energy conservation.

Existing research focused mainly on static risk allocation. Less research was directed to the phased and dynamic risk allocation. This study developed a theoretical three-stage EPC risk allocation model, which provided the theoretical support for dynamic EPC risk allocation of EPC projects. By addressing the contract incompleteness of the risk allocation, an operational method is developed. This is a new approach to allocate risks for EPC projects in a dynamic and staged way.

The purpose of this paper is to suggest possible extensions of the baseline Rubinstein sequential bargaining structure – applied to the negotiation of stationary infinitely termed contracts – that incorporate a direct reference to the “ideal” utilities of the players. This is a feature of the Kalai‐Smorodinsky cooperative solution – even if not of the generalized Nash maximand; it is usually not encountered in non‐cooperative equilibria.

First, it is argued that different bargaining protocols than conventionally staged are able to incorporate temporary all‐or (and)‐nothing splits of the pie. Scenarios are advanced where such episodes are interpreted either as – out of bargaining – war or unilateral appropriation events, or free experience contracts. Second, some modifications to the Rubinstein infinite horizon paradigm are experimented with, allowing for mixed strategies under alternate offers, and matching or synchronous decisions in a simultaneous (yet, discrete) bargaining environment. Solutions are derived where the reference to the winner‐takes‐it‐all outcome arises as a parallel – out‐of‐the‐protocol – outside option to the status quo point. In some cases, the limiting maximand for instantaneous bargaining was derived.

Rubinstein's optimal periodic division in a closed contract remained robust to most of the settings.

Presents possible extensions of the baseline Rubinstein sequential bargaining structure.