Game and Bargaining Solutions for Group Decision Problems

Abstract

When in the beginning of the fifties SIMON (1952/1953), for the first time,systematically tried to analyze decisions in organizations with a view to concluding from this to the necessary quantitative solution instruments, it had rashly been expected that the formal foundations of an organization theory with respect to business administration would be created very soon. In view of the developments which have in the meantime taken place in the fields of game and bargaining theory, and considering the knowledge obtained from the theory of multiple criteria decision making it seems reasonable today to make another attempt to find out how far quantitative economic concepts of this kind can be used for or contribute to the formulation and solution of decision problems in organizations, looking at these organizations as groups of independent decision makers with different utility functions. Thus, cooperative games with or without side payments as well as non-cooperative games care into consideration. As to the application of the theory of bargaining to decision problems in groups, two qualitatively different procedures have been developed, namely the approaches based on the game theory and the concessive models of bargaining formulated on the basis of spontaneous elements of behaviour.