The learning ability on critical bargaining information contributes to accelerating construction claim negotiations in the win-win situation. The purpose of this paper is to study how to apply Zeuthen strategy and Bayesian learning to simulate the dynamic bargaining process of claim negotiations with the consideration of discount factor and risk attitude.
The authors first adopted certainty equivalent method and curve fitting to build a party’s own curve utility function. Taking the opponent’s bottom line as the learning goal, the authors introduced Bayesian learning to refine former predicted linear utility function of the opponent according to every new counteroffer. Both parties’ utility functions were revised by taking discount factors into consideration. Accordingly, the authors developed a bilateral learning model in construction claim negotiations based on Zeuthen strategy.
The consistency of Zeuthen strategy and the Nash bargaining solution model guarantees the effectiveness of the bilateral learning model. Moreover, the illustrative example verifies the feasibility of this model.
As the authors developed the bilateral learning model by mathematical deduction, scholars are expected to collect empirical cases and compare actual solutions and model solutions in order to modify the model in future studies.
Negotiators could refer to this model to make offers dynamically, which is favorable for the parties to reach an agreement quickly and to avoid the escalation of claims into disputes.
The proposed model provides a supplement to the existing studies on dynamic construction claim negotiations.
Disputes are now considered endemic in the construction industry. They often arise from the poor resolution of claims in the course of construction projects. Efforts have been geared towards reducing the incidence of claims. These efforts are of two kinds: those that seek answers from basic principles and legal issues at the pre‐construction phase and those that attempt to solve the problems through claims management procedures at the construction phase. This paper reviews the developments in claims management and highlights the deficiencies in current claims management approaches. It focuses on the need for improvement of the efficiency of claims negotiation and suggests the use of multiagent systems as an approach to achieve it. The potential benefits of the suggested approach are discussed in the concluding section of the paper.
The purpose of this article is to show how a particular marketing paradigm developed in Denmark from the 1920s through to the 1960s. It peaked in the mid‐1950s and faded…
The purpose of this article is to show how a particular marketing paradigm developed in Denmark from the 1920s through to the 1960s. It peaked in the mid‐1950s and faded out with one major publication in the early 1970s. This article aims to provide a relatively detailed study of the initial phases of the school and its key ideas.
The study is based on primary sources, i.e. the writings of the scholars who shaped and developed the school. A significant number of the sources are available in Danish only.
While the study of marketing in America developed from the inductive, descriptive approach of the German Historical School, an essential precondition for the Copenhagen approach was the second wave of microeconomic theory of the 1930s. The article argues that it was a marketing management school, and that it offered early contributions to the development of marketing theory.
Relatively little has been written about Danish and Scandinavian history of marketing thought. The authors believe that a detailed review of the Copenhagen School of Marketing may be of some interest to marketing historians around the world.
According to officially published statistics, there began in the UK during 1979 some 2,080 stoppages of work due to industrial disputes, involving 4.584 million workers and resulting in 29.474 million working days lost (Department of Employment Gazette, 1980, p. 874). The purpose of this article is to summarise some of the main developments which have occurred over recent years in the economic analysis of strike activity and to illustrate some of the insights provided by economic theories of the collective bargaining process and its breakdown. We begin with a brief survey of the literature which provides a discussion of its major findings and of the limitations of existing studies. In subsequent sections, some basic theoretical concepts are introduced and after a brief discussion of some important elements of bargaining theory these are used in the construction of an alternative model of the breakdown of the collective bargaining process and the occurrence of strikes. In the penultimate section, this alternative model is tested against UK data and in the final section the main findings are summarised.
Decisions to initiate conflict often have an irrevocable character. They tend to transform the status quo in ways that it is often foreseen only with difficulty…
Decisions to initiate conflict often have an irrevocable character. They tend to transform the status quo in ways that it is often foreseen only with difficulty beforehand, and this change is then mostly impossible to undo. The sentence attributed to Colin Powell talking to President Bush about the Iraq War, “You break it, you own it,” illustrates the issue quite well. Closely linked to irrevocability is the issue of conflict costs. The uncertainty about conflicts and wars is due not only to the identity of the eventual winner but also to the costs inflicted upon the parties including the victorious ones. Often, prospective losers such as Napoleon and Hitler were initial winners who were in the end defeated by an accumulation of war costs they could not master.11There is some evidence that Napoleon, and then Hitler, were driven by increasing needs to absorb more and more territories. Clearly, Napoleon sold Louisiana to Jefferson to replenish his war chest and Hitler pillaged the central banks of conquered countries to support German military expenses. It is mostly the sunk costs associated with war that account for the irrevocability problem. Unfortunately, the literature on the formal analysis of war has not dealt with this matter, representing instead conflict as involving fixed costs or fixed cost expectancies at the onset. Additional cost estimates that should be taken by a decision-maker due to possible failures or irreversibility of actions are not considered. This is nowhere more evident than in the so-called bargaining model of conflict and war, whose numerous sometimes hidden assumptions have to be discussed and analyzed. The goal of this paper is to show that irrevocable decisions add to the cost of making them. Belligerent parties often have a tendency to minimize these especially, and this is an interesting twist of the analysis of irrevocable decision-making, if estimations of the gains of war are made on the basis of risk neutral expected utility calculations. The latter consideration leads me then to formulate alternative theories of war and conflict under the assumption of rationality.
The main thesis of the chapter is to introduce a new idea to the field of peace negotiations, which will require the development of a new model of negotiations to enforce…
The main thesis of the chapter is to introduce a new idea to the field of peace negotiations, which will require the development of a new model of negotiations to enforce peace. The existing models of peace negotiations highlight the existence of a positive peace dividend to parties involved in conflicts and peace negotiation. They, hence, usually highlight a gradual and dynamic adjustment, or movement, away from a conflict-ridden outcome towards a peaceful outcome that offers a positive peace dividend to all relevant stakeholders. In comparison with the status quo, peace brings additional economic returns and peace therefore offers a win–win situation. Despite the fact that a win–win situation does not ensure the enforcement of peace, as agents can easily get locked into what is commonly known as the prisoners' dilemma – yet the possibility of Pareto improvement makes negotiations for peace somewhat artificial. At least in the short run all agents involved in active conflicts are apprehensive of peace as they expect immediate (expected) returns from making peace can outweigh the expected returns from conflicts. An important work that sidesteps the win–win situation of peace dividends is by Isard and Azis (1999) who introduced the possibility of an immediate loss of economic returns from the peace process in their conflict management procedure (CMP). However, in the existing work on CMP, the long-run returns from peace outweigh that from conflicts. One therefore presumes that peace brings economic benefits to all. The existing CMPs therefore assume away any possibility of lower economic returns from peace. There are some important models in which peace negotiations are also modelled as a zero-sum game in which the gain of a party represents a loss to others, which is known as win–lose negotiations. In this work we introduce the possibility of bargaining and negotiations against the backdrop of potential immediate losses while peace is favoured simply for its intrinsic value and not for pecuniary returns. In the real world, there is evidence to believe that agents involved in conflicts are painfully aware of two things: first, the decision-making agents who choose between conflicts vis-à-vis peace are the leaders who get rarely affected by economic returns from conflicts or peace. It is usually the foot soldiers who bear the brunt of costly conflicts and can benefit from peace. Secondly, most people value peace for the sake of it as peace has an intrinsic value that ensures the protection of rights and their lives and protection from violence. Thus, peace is a collective good that provides little extra economic returns to actual decision-makers who choose between courses of conflicts or peace.
Reviews the international response to Marktform und Gleichgewicht, and questions the reactions of astonishment by some critics, including Scherer, concerning Stackelberg’s…
Reviews the international response to Marktform und Gleichgewicht, and questions the reactions of astonishment by some critics, including Scherer, concerning Stackelberg’s explanation of disequilibrium of certain market structures. Defends Stackelberg’s standpoint by considering the specific historical context. Looks at Cournot’s continuity thesis and challenges the assumption of analogous market configurations. Suggests that Stackelberg’s theoretical derivations may have been intended to provoke further scientific study.