Geodesic
Differential Bargaining Games as Microfoundations for Production Function
Contributions to game theory and management, Tome 6 (2013), pp. 289-300.

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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 possible factor prices and participants' weights (moral-ethical assessments). These games result, correspondingly, in a factor price curve and a weight curve — structures dual to a production function. Ultimately, under constant bargaining powers of the participants, the Cobb–Douglas form of the production function is received.
Keywords: bargaining, differential games, production factors, choice of technology, duality, production function. 
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Vladimir Matveenko. Differential Bargaining Games as Microfoundations for Production Function. Contributions to game theory and management, Tome 6 (2013), pp. 289-300. http://geodesic.mathdoc.fr/item/CGTM_2013_6_a21/

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