New bargaining solution revolutionizes interdependent negotiations for policy applications.
A new bargaining solution called the recursive Nash-in-Nash has been developed for negotiations. It considers renegotiation and contingent contracts, unlike the standard Nash-in-Nash solution. The key difference is how disagreement is handled, assuming bargaining payoffs are based on this point. The recursive Nash-in-Nash solution is equivalent to the Shapley value or Myerson value in certain cases, making it easier to calculate for policy applications.