Two parties bargaining over a pie, the size of which is determined by their previous investment decisions. The bargaining rule is sensitive to investment behavior. Two games are considered. In both, bargaining proceeds according to the Nash Demand Game when a symmetric investments profile is...

Two parties bargaining over a pie whose size is determined by the investment decisions of both. The bargaining rule is sensitive to the investment behavior. If a symmetric investments pro le is observed, bargaining proceeds according to the Nash Demand Game; otherwise bargaining proceeds...