Non-Myopic Negotiators See What's Best

Abstract

We consider revenue negotiation problems in iterative settings. In our model, a group of agentshas some initial resources, used in order to generate revenue. Agents must agree on some way of dividing resources, but there’s a twist. At every time-step, the revenue shares received at time t are agent resources at time t + 1, and the game is repeated. The key issue here is that the way resources are shared has a dramatic effect on long term social welfare, so in order to maximize individual long-term revenue one must consider the welfare of others, a behavior not captured by other models of cooperation and bargaining. Our work focuses on homogeneous production functions. We identify conditions that ensure that the socially optimal outcome is an epsilon-Nash equilibrium. We apply our results to some families of utility functions, and discuss their strategic implications.