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Regular version of the site

Book chapter

Differential bargaining games as microfoundations for production functions

P. 289-300.

In the present paper the game theory is applied to an important open question in economics: providing microfoundations for often-used types of production function. Simple differential games of bargaining are proposed to model a behavior of workers and capital-owners in processes of formation of a set of admissible factor prices or participants’ weights (moral-ethical assessments). These games result, correspondingly, in a factor price curve and a weight curve – structures dual to production function. Ultimately, under constant bargaining powers of the participants, the Cobb-Douglas production function is received.

In book

Differential bargaining games as microfoundations for production functions
Iss. 6. St. Petersburg: Graduate School of Management, St. Petersburg University, 2013.